#31
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Re: The Tax Man Cometh
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To file as a pro dont you have to have won in 3 of the last 5 years? [/ QUOTE ] This is only necessary if you are going to be reporting a net loss this year. Basically, the IRS doesn't want to let people report a gambling loss unless they can prove that they're professionals. |
#32
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Re: The Tax Man Cometh
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How am i cheating? Show me the tax code that says im cheating on my taxes... Edit-Until the government more clearly defines a "session". Who is to say it is a day or a month or a year? Once this is clarified i will gladly do whatever it is they want me to do. [/ QUOTE ] Wow. You do realize what will happen if you get audited, right? If the case gets to tax court the way you have presented it, the IRS will ask for a summary judgment in their favor.....and they will get it. |
#33
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Re: The Tax Man Cometh
Everything Metetron has said is right on target. I have worked with a financial advisor and CPA as well.
Krishan |
#34
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Re: The Tax Man Cometh
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Since i only play online and am a winning player, there are no losses to deduct(some people will really have a problem with that, but i think its reasonable and also legal under current tax code.) [/ QUOTE ] You are quite wrong. Page 12 of Publication 529 of the IRS Tax code: "You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full ammount of your winnings as income and claim your losses (up to the ammount of winngings) as an itemized deduction." You can not legally claim net wins. |
#35
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Re: The Tax Man Cometh
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You are going to get raped if you don't file as professional and get auditied. Filing as a professional does have its advantages, however. [/ QUOTE ] Yes, definitely file as a professional. Don't fool yourself into thinking that because you may be a full time student or something else (you didn't specify) that your $60K income almost all from poker can somehow be qualified as casual income. They can penalize you big time for avoiding FICA taxes too. Start doing it right from the start, you won't regret it. There are grey areas between professional and casual - but you are not in one - you are a professional. |
#36
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Re: The Tax Man Cometh
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But what do you do if you get audited next year and they say you owe them $200,000 in unpaid taxes, penalties, and interest? [img]/images/graemlins/frown.gif[/img] Just because you havn't been caught at this point doesn't mean cheating on your taxes is a smart thing to do. A lot of people here have speculated that in the next few years the IRS may start taking a closer look at poker winnings now that it has become so popular... [/ QUOTE ] If they audit him and force him to report winning sessions as income and losing as deductions, the main difference is going to be that he'll lose the standed deduction which will add less than $2000 to his tax liability. Let's not blow this out of proportion. I think for online poker, a good case can be made that a year's play is a "session". Not reporting winnings not cahsed out is much riskier. That could result in substantial additional income, interest and penalties if they rule against you. |
#37
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Re: The Tax Man Cometh
Be careful... this thread already has a lot of incorrect information. You definitely cannot decide that a whole year of play counts as one session. I've written a couple of short articles with references and quotes from the IRS:
http://www.onlinepokerfaq.com/guide/tax-sessions.html http://www.onlinepokerfaq.com/guide/...fessional.html -Toad |
#38
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Re: The Tax Man Cometh
So...if you had a $100K in winning sessions and $50K n losing sessions does that mean your income is $100K and you're in that tax bracket? That seems pretty harsh. BTW, yes I am a student.
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#39
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Re: The Tax Man Cometh
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So...if you had a $100K in winning sessions and $50K n losing sessions does that mean your income is $100K and you're in that tax bracket? [/ QUOTE ] Yup. And if you itemize, you can deduct the $50k. [ QUOTE ] That seems pretty harsh. [/ QUOTE ] It is. |
#40
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Re: The Tax Man Cometh
No, this is not correct. Your tax bracket is determined by your taxable income, which comes after your itemized deductions. The tax rules for gamblers are bad, but not that bad.
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