#11
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Re: Interesting Internet Tax law for Illinois
[ QUOTE ]
I don't understand what you mean. Are you saying you have to list all your winnings on the front of your 1040 but can't deduct the loses on your itemized deductions? [/ QUOTE ] That is exactly what he is saying and it is true for state income tax in several states. I'm not familiar with Illinois in particular. Probably they rationalize it as a sin tax and a remedy for fabricated losses. |
#12
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Re: Interesting Internet Tax law for Illinois
[ QUOTE ]
This is referring to state income taxes, not federal I assume. [/ QUOTE ] Yes, this is only for state income taxes and only in a few states. |
#13
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Re: Interesting Internet Tax law for Illinois
Indiana and Ohio are two I know of.
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#14
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Re: Interesting Internet Tax law for Illinois
[ QUOTE ]
I recently found out that in Illinois that you are unable to deduct your losing sessions after adding all your winning sessions as gross income. I guess this is the case with about a dozen other states as well. Wow this just sucks. [/ QUOTE ] file as a professional |
#15
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Re: Interesting Internet Tax law for Illinois
Being as I also had a full time job for the most of the year and am currently part time + school full time filing as a professional is not something that would likely stand up if audited. Also, when filing as a professional there is a ~15% self employment tax I would also have to pay.
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#16
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Re: Interesting Internet Tax law for Illinois
better than taxed on all your above the line winnings wihtout deductions for losses. 15% self-employment is OK in comparison.
If you have enough winnings to want to file taxes, professional status should not be too far a leap. |
#17
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Filing as a profession
Just to echo what has been said, assuming you kept good records and you are discussing poker winnings, you can probably file as a professional.
Massachusetts does not allow deduction for losses, but accepts federal definition of prof. gambler and therefore allows deductions for losses on a schedule C if you are filing accordingly. You'll get dinged for SE, but without knowing your exact situation it will almost assuredly be preferable. |
#18
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Re: Interesting Internet Tax law for Illinois
[ QUOTE ]
2. If you just paid them for the $25k you won even as a casual gambler I would be willing to bet it would work out fine. [/ QUOTE ] The problem with this is that you just enter your AGI from the federal form on your Illinois tax form and use that as a starting point. I think there's a better than even chance that they verify this number with the IRS. To make this work, you'd have to use your net winnings as income on the federal form (which I can't do as a non-professional) or hope Illinois doesn't compare their number with the IRS. I don't like my chances in either scenario. I'll run the numbers, but since I only play recreationally (my winning sessions probably don't add up to a huge number) and the Illinois tax rate is only 3%, I'll probably just suck it up and pay them. They can't make me like it, though. It occurred to me a couple of months ago that I might be better off playing the same number of hours in longer sessions rather than shorter. As an Illinois taxpayer, I'd rather net $5000 in 100 sessions at +$10,000 and -$5000 than net the same $5000 in 200 sessions at +$12,500 and -$7500. I'm assuming longer sessions would even the variance out a little bit. |
#19
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Re: Interesting Internet Tax law for Illinois
Keep in mind, if you file as a pro, you will be liable for an additional 7.5% self-employment tax. There is a lot that goes into the cost-benefit analysis of whether or not to go pro.
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#20
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Re: Interesting Internet Tax law for Illinois
wow, i hate/will hate taxes
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