Poker and Taxes....This is why there is so much confusion

[Chadt74]

BBlock just a few notes...

1 - your patents claiming you as a dependent has nothing to do with your poker income

2 - As for deductions, the general rule is that unless you own a home your deductions will not be greater than the standard deduction the IRS gives you.

3 - Withdrawals do not matter it is income generations. For example if you start the year with $1,000 in your bank account and $0 in Netteller. In 2004 if you earn $5,000 in gambling winnings and withdrawal $500 of it so your ending balances (assuming no other actions) are $1,500 in bank account and $4,500 in Netteller you need to report $5k if income not $500.

4 - How will it effect your Financial Aid? Well you will have more income, but how that effects your aid depends on the school (state school or not etc) but more income generally = less support but $4k will not hit you too hard.

Grey - to you unless you can prove you use that internet connection and second LCD screen 100% for poker than you can not deduct 100% of them as they can be used for non-business use. The poker books, yes they can be 100% since you are not using them for any reason other than your business (well hopefully you are not that kinky). That is just some general advice.

And what exactly does itemize mean? Certain items can be deducted against your taxable income. An easy example is donations made to qualified charities. The problem is that most people who do not own a house do not have enough of these deductions to equal more than the standard deduction. As a college student you will probably want to take the standard deduction (again in most cases) since your poker books and the percentage of the internet connection will not be greater than the standard deduction; and no you can not take both, it is one or the other.

Kellon, with the amount of rake going offshore I am pushing for the US to keep some of that $$ inhouse even though it might hurt me a little.

For what it is worth I am a CPA in Mass, and read this whole thread as CPA gives good general advice as he is more tax focused than I am.