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#1
11-15-2005, 05:27 PM
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Re: Taxes question
[ QUOTE ]
[ QUOTE ] You dont need an accountant. Turbo Tax handles it just fine. You already know that you need to seperate your wins and losses. You dont need an accountant to do the math for you. [/ QUOTE ] Well my father is very knowledgabke when it comes to taxes so i plan to use him. Im just curious if anyone has an idea on how much ill owe. [/ QUOTE ] Did you have any other job during the year? If poker was your only source of income I would definitely file as a professional. I'm not sure of the exact tax rates for 2006, but the lowest brackets are generally 10 to 15 percent. So depending on your deductions and credits I would expect to owe around $500 if you haven't paid any tax into the system. 
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#4
11-15-2005, 05:31 PM
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Re: Taxes question
When should I start looking into an accountant and when do i need to file by?
I'm a newbie and have never filed my own taxes before.
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#5
11-15-2005, 05:27 PM
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Re: Taxes question
Does the fact that he is in college affect anything?
Could he file a secedule C because it's his sole source of income? If he can, would it be wise to do so? Does being a dependant change any of his tax liability? Would having a professional tax prepairer redue the chances of him being audited? By the way, how do you define a session? [img]/images/graemlins/smile.gif[/img] What about state tax liability? Some states don't allow you to deduct any gambling loses. Is there a way around this for his state? Does he owe any city taxes? Would that be the city he lives in for college and earned the money or the city where his parents live? I don't really want answers to any of these questions. [img]/images/graemlins/smile.gif[/img] I'm just trying to point out that gambling tax situations are often very complicated and for most people talking a professional is much better than any 'do-it-yourself' method.
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#6
11-15-2005, 05:58 PM
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Re: Taxes question
[ QUOTE ]
Does the fact that he is in college affect anything? [/ QUOTE ] Not really, but if he's paying for his college education upfront he gets some nice deductions/credits. [ QUOTE ] Could he file a secedule C because it's his sole source of income? [/ QUOTE ] Yes, this would be my recommendation [ QUOTE ] If he can, would it be wise to do so? [/ QUOTE ] Definitely. Basically it's 40k vs. 10k. [ QUOTE ] Does being a dependant change any of his tax liability? [/ QUOTE ] Unfortunately for him he loses his personal exemption, his parents get it instead. So his taxable income is a few thou higher than it could be. [ QUOTE ] Would having a professional tax prepairer redue the chances of him being audited? [/ QUOTE ] No, the IRS doesn't take that into consideration. They have certain things they flag as unusual and act accordingly. [ QUOTE ] By the way, how do you define a session? [img]/images/graemlins/smile.gif[/img] [/ QUOTE ] Well, nobody knows. This type of question hasn't really been defined well for B&M play, let alone online poker. Best way I've seen it defined is one continuous block of time devoted to one activity. So if you login to Party and sit down at 4 Hold'em tables and play for 4 hours. That's 1 session. However, separate games would get their own session. So even if you play them simultaneously, if you play 2 tables of HE and 2 of Omaha, I would treat each of those games as separate sessions. But different limits within a type of game wouldn't get their own sessions, if that makes sense. In the end however, the IRS could step in and say time spent at every different table is a session. [ QUOTE ] What about state tax liability? Some states don't allow you to deduct any gambling loses. Is there a way around this for his state? [/ QUOTE ] Not sure, would have to check his state's tax code. [ QUOTE ] Does he owe any city taxes? Would that be the city he lives in for college and earned the money or the city where his parents live? [/ QUOTE ] Wow good question. Technically you should pay city taxes on the money where it was earned. I live in a city that doesn't have a local income tax so I don't have to worry about this. First I would check with each city (college, presumably where he earned some of it, and his hometown to see if they even have an income tax). [ QUOTE ] I don't really want answers to any of these questions. [img]/images/graemlins/smile.gif[/img] I'm just trying to point out that gambling tax situations are often very complicated and for most people talking a professional is much better than any 'do-it-yourself' method. [/ QUOTE ] You don't want answers, but I answered it anyway for the guy's benefit. My advice is always to seek a professionals help, or at the very least plug that crap into TurboTax and let it ride baby!!! When seeking a pro's help however, it does help to have some knowledge about your situation, so that you can thoroughly question him. In the end that pro you decided to meet with may know about as much as you do when it comes to a lot of these gambling situations...
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