Paying taxes on winnings if under 21

[BoatLover88]

One of my friends was wondering how he should go about paying his taxes on his poker winnings from online sites and under 21 casinos if he is under 21 and living in the US(because he is). He was wondering what tax forms and specific filings he should use to pay the lowest percents possible. He cashes out about $20K a year in checks directly from the sites and is a college student. He is also an affiliate and was wondering if he should file seperately or consider it a seperate job when filing for taxes. Thank you.

[Dilbert]

If you're under 21 you're exempt from taxes. Trust me [img]/images/graemlins/grin.gif[/img]

[John Deere]

Why does it matter that he's under 21? List it all as gambling income, take the standard deduction, and hope for the best.

[WSOPWinner2005]

Personally, I would consult a CPA regarding the legality of gambling income when you are underage.

Also, regarding affiliate income - In some states you can actually be charged with a misdemeanor crime for first offense and all the way up to folenies for being an affiliate. Don't bite the delivery boy, like I said I would consult a CPA.

[Gotmilk]

In California the legal age to gamble is 18 (the legal age to gamble in a casino which serves alcohol is 21). Many states are like this? I think if anything is illegal, it's the online gambling-- Most states have state lotteries that are 18 to buy tickets for!

[cardcounter0]

Illegal or legal has nothing to do with paying taxes.

If you sell crack, you can avoid some nasty federal charges by paying the taxes on the profit.

[WSOPWinner2005]

18 For all lottery stuff here and smokes, but 21 for everything else.. Gambling to drinking [img]/images/graemlins/frown.gif[/img]

I guess that would be another thing that depends on what state you live in...

[WSOPWinner2005]

HAAHAHAHAAHAH This one goes in the Hall of Fame for ingenuity [img]/images/graemlins/smirk.gif[/img]

How many damn crack dealers file their taxes on income? And can they claim the free samples they hand out to 12 year olds in the school yard as being tax deductable?

Would be a bitch filing and listing your itemized deductions under Advertising - IF the IRS ever contacted you wanting a copy of receipts or checks! How do you habdle that one? Do you get the 12 year old kid to sign a receipt for the free crack sample or do you just take the tax hit?

[cardcounter0]

I would just take the tax hit, myself. The IRS is all about collecting taxes. As long as they get paid their taxes, they don't care. It is illegal for them to share information you give them for tax purposes with law enforcement agencies.

A few years back a friend of mine reverse stung the State Police for about $70,000.

They set up a huge undercover drug buy from him. He showed up and sold them $70Gs of that semi-legal kiddie dope, caffine pill stuff you see sold behind the counter of carry-outs, etc.

After the tests came back from the lab showing it wasn't the illegal speed they thought they were getting, they tried to nail him for a bunch of other stuff.

However, not only had he already paid the sales tax on what he sold them, he had even gotten a business license from the State and City before the deal. Sorry, Boys -- Couldn't help what you guys thought you were buying, but it was perfectly legit.

[BoatLover88]

Well obviously he knows it is illegal for him to be gambling under 21 in the state he is connecting from. That set aside, he doesn't want to get in double trouble so to speak if he gets caught for one thing or the other. But will putting the profits as gambling under taxes raise an eyebrow and make them come down on him for everything or should he just hope the authorites don't find an under 21 gambling and pay taxes on everything? Which method of paying taxes would be best (i.e. form 1120s, sch. C etc.)?