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#1
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Anyone over 6 figures actually filing as a Pro?
So filing as a pro you face an additional 15% self employment tax, but you get to write-off all business-related expenses.
But if you're making $100K+, that means you would have to have more than $15K in expenses for it to be worth it. Right? I don't see why anyone pulling significant dough would file as a pro. |
#2
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Re: Anyone over 6 figures actually filing as a Pro?
how far can you take business related expenses? computer? car? hotel rooms in Vegas?
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#3
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Re: Anyone over 6 figures actually filing as a Pro?
Yes, yes and yes to your question about how far you can take expenses. The deductions on cars and travel are very generous if you file as a professional. For me, I can take the car, computer, travel expenses (hotel, some meals, tolls, parking, insurance etc.) home office space use, professional books and journals, bank expenses, internet costs - it's pretty easy to get your gross income down to a reasonable amount. So far, I've hand no problems, and from everything I've read, it's all legal. DISCLAIMER - WTF do I know............you're on your own.
Dogmeat [img]/images/graemlins/spade.gif[/img] |
#4
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Re: Anyone over 6 figures actually filing as a Pro?
Ya but as a pro you can pay taxes on just your net income, while if you don't file as a pro you have to pay taxes on your gross and deduct your losses. So even without expenses filing as a pro may be economical for something making 6 figures.
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#5
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Re: Anyone over 6 figures actually filing as a Pro?
"Ya but as a pro you can pay taxes on just your net income, while if you don't file as a pro you have to pay taxes on your gross and deduct your losses."
This should make no differece in your net income aside from the standard deduction and a few other minor concerns. |
#6
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Re: Anyone over 6 figures actually filing as a Pro?
[ QUOTE ]
This should make no differece in your net income aside from the standard deduction and a few other minor concerns. [/ QUOTE ] Except you could end up paying the ATM tax instead. Stu |
#7
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Re: Anyone over 6 figures actually filing as a Pro?
Yeah I grouped that in with "minor considerations"--even though I don't know that much about it, my understanding is that it's fairly unlikely you'd have to pay that. The main concern, regardless of this, is whether the IRS, in an audit, is actually going to accept someone claiming to be a recreational player with hundreds of sessions and 100k plus in winnings, especially when it's likely they make less at their real job.
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#8
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Re: Anyone over 6 figures actually filing as a Pro?
[ QUOTE ]
Ya but as a pro you can pay taxes on just your net income, while if you don't file as a pro you have to pay taxes on your gross and deduct your losses. So even without expenses filing as a pro may be economical for something making 6 figures. [/ QUOTE ] I understand this distinction, and I wish I could just report my net winnings for a year, but as someone who isn't a pro, I understand I cannot. However, can you explain why (financially) its better to just pay taxes on the net? I only see the advantadges from a record keeping perspective. |
#9
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Re: Anyone over 6 figures actually filing as a Pro?
[ QUOTE ]
I understand this distinction, and I wish I could just report my net winnings for a year, but as someone who isn't a pro, I understand I cannot. However, can you explain why (financially) its better to just pay tzxes on the net? I only see the advantadges from a record keeping perspective. [/ QUOTE ] When the gross is counted as income it can push your gross income so high that you could lose some deductions(i.e. medical expenses) or worse be forced to pay the ATM. Stu |
#10
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Re: Anyone over 6 figures actually filing as a Pro?
If you play a reasonable number of hours per week with an expectation of making income then you can file as a pro.
I don't know if this is the exact definition but that's pretty much it. So...if you have a regular job...but play 20 hours a week AND are basically playing that as your 2nd job....then you can reasonably file as a pro and take all the deductions that you get to tack on there. Gambler's Guide to Taxes by Walter Lewis has more on this. Just basically pointing out that you CAN have another job but STILL can file as a pro. If you are just an occasional 4-hours-on-the-weekend type player then you couldn't get away with filing as a pro certainly. |
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