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#11
02-15-2005, 03:03 PM
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Re: Poker and Taxes....This is why there is so much confusion
[ QUOTE ]
thanks for the reply. [ QUOTE ] If you are a casual player and not a "tax professional", then your losses would have to be repoted on Schedule A, the itemized deductions. Many people either don't itemize or have these deductions phased out, so you do not get a benefit for all of your losses. [/ QUOTE ] I am both a casual player, and have itemized deductions (I believe Pokertracker tracks all the neccesary info?). So session start/end would be relevant for me, correct? [/ QUOTE ] Correct. Pokertracker gives you everything you need. 
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#12
02-15-2005, 03:10 PM
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Re: Poker and Taxes....This is why there is so much confusion
So while I may pay extra taxes, is it correct that I can report my yearly winnings as if it truely was one single session? Just add it to my income and be done with it?
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#13
02-15-2005, 03:42 PM
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Re: Poker and Taxes....This is why there is so much confusion
I checked Sched. A the other day and it appeared to me that gambling losses are not phased out (limited) depending on your AGI, like many of the other deductions. I think the instructions stated specifically that the full amount of losses, up to the amount of reported winnings, were deductable. My recollection, anyway.
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#14
02-15-2005, 03:47 PM
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Re: Poker and Taxes....This is why there is so much confusion
[ QUOTE ]
I checked Sched. A the other day and it appeared to me that gambling losses are not phased out (limited) depending on your AGI, like many of the other deductions. I think the instructions stated specifically that the full amount of losses, up to the amount of reported winnings, were deductable. My recollection, anyway. [/ QUOTE ] You are correct, high income taxpayers do not have to worry about gambling losses being phased out.
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#15
02-15-2005, 03:50 PM
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Re: Poker and Taxes....This is why there is so much confusion
Your recollection is correct that gambling losses are specifically excepted from the phaseout rules. The main problem is that the increase in AGI from reporting your gambling winnings correctly can cause a large phaseout of your other itemized deductions.
For those with tax credits, the increase in AGI can also eliminate most tax credits when compared to people of the same income level. I would also caution that some colleges look at AGI over taxable income in their calculation of financial aid.
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#16
02-15-2005, 04:15 PM
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Re: Poker and Taxes....This is why there is so much confusion
[ QUOTE ]
[ QUOTE ] I checked Sched. A the other day and it appeared to me that gambling losses are not phased out (limited) depending on your AGI, like many of the other deductions. I think the instructions stated specifically that the full amount of losses, up to the amount of reported winnings, were deductable. My recollection, anyway. [/ QUOTE ] You are correct, high income taxpayers do not have to worry about gambling losses being phased out. [/ QUOTE ] Does this include AMT considerations? 2nd BTW thanks for kicking up this thread, CPA.
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#17
02-15-2005, 04:20 PM
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Re: Poker and Taxes....This is why there is so much confusion
Let's assume a few things:
1. I am not a professional gambler. 2. I'm married. 3. I won $20000 in 2004. 4. I lost $15000 in 2004. If I don't really have any other deductions, does this mean I get screwed big time? Let's assume I have $1000 of deductions so I would just opt for the standard deduction. Now, because of poker, I lose that $9500 deduction, because I have to say that I lost $15000 gambling, esentially robbing me of $9500 in deductions. Is this correct thinking? I'm just trying to get a sense of how screwed I'm getting.
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#18
02-15-2005, 04:25 PM
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Re: Poker and Taxes....This is why there is so much confusion
[ QUOTE ]
[ QUOTE ] [ QUOTE ] I checked Sched. A the other day and it appeared to me that gambling losses are not phased out (limited) depending on your AGI, like many of the other deductions. I think the instructions stated specifically that the full amount of losses, up to the amount of reported winnings, were deductable. My recollection, anyway. [/ QUOTE ] You are correct, high income taxpayers do not have to worry about gambling losses being phased out. [/ QUOTE ] Does this include AMT considerations? 2nd BTW thanks for kicking up this thread, CPA. [/ QUOTE ] Good question about AMT....but if we start talking AMT and exclusion items, people will lose interest in this thread in a hurry. If you have a specific question, PM me and maybe I can answer it.
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#19
02-15-2005, 04:33 PM
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Re: Poker and Taxes....This is why there is so much confusion
I have a couple questions....
I filed my taxes already and included my net gambling winnings as income on my taxes. I did not claim any losses. I know that this is not what the IRS wants. They want itemized session info with winning sessions on one side of the docket and losing sessions on the other side of the docket. This was impossible for me to supply as I did not anticipate winning as much money as I won when I started out. I got pokertracker about 50,000 hands into my poker playing career and have no records of my play prior to that purchase. I have also played on sites that pokertracker does not support from which I have no data of sessions. Here is what I have though... I can access and clearly show every deposit and withdrawal to and from my bank account to every poker account and neteller account I have been associated with. I have many sessions in pokertracker but not all of them. I can clearly show that my net winnings are indeed what I reported them to be. This included all bonuses I received as a result of my play and all monies in my poker account at the end of the day on 12-31-04. If audited I'm prepared to show them all of this info and explain that poker is all just one long session. I think I have acted in good faith. What is the likely outcome? I always assumed I would have to get a lawyer and would prevail in court if it went that far. What is the worst case scenario if I'm audited? Would my situation improve if I started keeping a journal of all my sessions starting today (the day I realized my recordkeeping was not sufficient?) and could show them that I was making an effort to comply with their silly rules?
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#20
02-15-2005, 04:53 PM
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Re: Poker and Taxes....This is why there is so much confusion
A couple of things for everybody to remember about IRS Auditors:
1. Some are smart, some are not so smart. 2. Most are nice and reasonable, some are out to stick it to you. As such, it is really hard to answer the question "what will happen if I get audited." A reasonable auditor may accept what you are doing. If you act in good faith, you will not be subject to penalties or go to jail or anything like that. The one question I can answer is that your situation would improve if you kept detailed records.
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