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#1
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Ok, I've been digging through info online and threads here and am comfortable with the fact that I need to file my online winnings as other income (since I also have a full-time job and won't file using Schedule C). And my losses are itemized deductions.
My main question is how people deal with defining a "session" online. According to a Cardplayer (I believe) article I read, poker sessions should be each table you play. So, for example if I play mostly $33 SNGs online, a a 4th or lower is a losing session of $-33. And a win is a winning session of $117 and so forth. Doing it this way over a full year (only have about 6 mos this year), could possibly yield huge numbers for my AGI (adjusted gross income) as well as huge Itemized Deductions. And large amounts for Itemized Deductions is a red flag for the IRS. Furthermore, I found that at levels of AGI above $139,500, your itemized deductions are reduced by 3%. And that AGI may be easier to hit than you think. So if you had $100,000 of income plus $100,000 in poker winnings and $70,000 in poker losses, you'd have to exclude $1,815 in losses. So, for those of you who have done this before and/or know what you're doing, could you give me some insight here? I want to do things the right way, but the most advantageous right way. [img]/images/graemlins/tongue.gif[/img] |
#2
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Since someone already started another thread on the subject, i figured I would just jump in and ask my own tax question.
Are there any good books (or other good complete information available) on the subject of Taxes and Gambling? The people here are great, but I think I need a more solid background and would like a good resource for that information. I didn't really win enough this year (or previous) to bother reporting, but I plan to make considerably more this year and want to try and keep on the good side of the IRS if possible. |
#3
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[ QUOTE ]
Are there any good books (or other good complete information available) on the subject of Taxes and Gambling? [/ QUOTE ] R.B.S. Tax Services |
#4
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[ QUOTE ]
R.B.S. Tax Services [/ QUOTE ] I don't trust any business that has a completely frivolous java applet menu on the opening page of their website. |
#5
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I am fairly certain the only way the tax law screws you is because it forces you to itemize your deductions. If you would have taken the standard deduction if it were not for poker winnings, and you had a small amount of wins/losses, then it screwss you.
Standard deduction is about 4k. If you win 3k, lose 2k- then yes- the system screws you. You will end up taking the standard deduction and basically be paying full tax on the 3k. However, if you are alrady itemizing your deducitons, or you are a big player so your losses are 10k+, then it really does not matter. In fact, the current system (in my opinion) is nice to big internet players. Big internet players do not have many 'business costs' like traveling. Thus, If you just sit on your ass at home and make 100k playing net poker, (let's say 160k wins, 60k losses), you just pay tax on 100k but you avoid FICA/social security which is huge. If you declare as pro, you have to pay double fica/social security due to self-employment tax. The current system sucks for small players who win a little, but have losses of around or less than 4k (provided they take the standard deductions). |
#6
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Other questions to ask yourself.
1. What's my probability of being audited? If your income is primarily W2 income, and you make less than $100K, it's probably slightly more likely than getting struck by lightning. 2. What's the probability of the IRS independently seeing evidence that you have this other source of income? If you have not made any transfers into your checking account of more than $9,999.99, the bank won't tell them without being asked. Like any other individual or business, they don't talk to the IRS any more than they have to. 3. What's the probability of you being audited (this year or in the future) if you *do* include significant gambling deductions? My guess is, pretty damn high. Not making any suggestions here, just food for thought. There's an old adage. It's easier to ask forgiveness than permission. |
#7
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[ QUOTE ]
Not making any suggestions here, just food for thought. There's an old adage. It's easier to ask forgiveness than permission. [/ QUOTE ] Brilliant. Truly brilliant. |
#8
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And here I thought Kurn only gave sage advice with regard to tournament strategy. [img]/images/graemlins/grin.gif[/img]
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#9
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Kurn,
I normally use neteller for withdrawals, but I have heard that Party issues checks out of Miami. I live in Florida, if I was to cash these checks at the bank (if its posible) in person, to what extent is this reported to the IRS? |
#10
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Yes I get paid by check from Party and they are issued on a Florida Bank. The 2nd part of your question does not matter since you should file your taxes correctly.
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