Re: Tax return question
 

$5,000 single or married filing separate, $10,000 married filing joint, $7,300 head of household

http://www.irs.gov/publications/p501/ar02.html#d0e6188

Re: Tax return question
 

chance of audit is 0.1%

Re: Tax return question
 

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chance of audit is 0.1%

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"Never tell me the odds." - Han Solo [img]/images/graemlins/grin.gif[/img]

Re: Tax return question
 

nobody's going to notice $500...

Re: Tax return question
 

[ QUOTE ]
chance of audit is 0.1%

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chance of being dealt AA is 0.45% less than 5 times as great.

Re: Tax return question
 

Subtract rake and losing lottery tickets too!

Re: Tax return question
 

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Subtract rake

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no

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and losing lottery tickets too!

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yes

Re: Tax return question
 

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Would it be problematic to simply declare your profit as income, and list no losses as a deduction?

IRS publication 529 specifically forbids reporting the net of wins and losses as income. All wins must be reported as income on form 1040 and all losses must be reported as an itemized deduction on Schedule A.

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The above is the legalese. Congress REALLY screws gamblers. In theory, if you make relatively little money or just don't have many deductions so that you don't itemize, Congress has proclaimed that you cannot deduct any loses at all, and must declare all wins of every sort. So in theory if you play 30 tournaments for $100 each in a year and take in $3000 in winnings, you are expected to declare $3000 in income and you cannot offset the $3000 in loses. You broke even for the year, but are expected to pay income tax on $3000. The ONLY way to legally deduct loses is to itemize on schedule A, or quit your real job and become a professional gambler and move it all into schedule C.

And people wonder why folks cheat on their taxes. This is one of those rules that doesn't pass common-sense fairness tests. Write your congresscritter and demand they fix this.

Re: Tax return question
 

If you're reporting less than $100,000 in income *and* it's mostly W2 income (wages, salaries & tips) you have slightly less chance of being audited than of being eaten by a shark.

Re: Tax return question
 

[ QUOTE ]
If you're reporting less than $100,000 in income *and* it's mostly W2 income (wages, salaries & tips) you have slightly less chance of being audited than of being eaten by a shark.

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Wrong, especially if you have income from other sources such as gambling winnings. Additionally if you ever have more than 10,000 AT ONE TIME in an offshore business or account (such as Neteller) you must notify the IRS. This is currently an insta-audit, not pleasant (I know from experience. The IRS and I have a history together, generally I lose).


TT