Interesting Internet Tax law for Illinois

[obsidian]

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.

[dogmeat]

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?

Does Illinois not have anything like an IRS Schedule C?

Dogmeat [img]/images/graemlins/spade.gif[/img]

[Reef]

lol, what about those who win 40k total but lose 100k total.. who were the morons who thought this would be a good idea

[JohnnyHumongous]

what other states?

[obsidian]

[ 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?

Does Illinois not have anything like an IRS Schedule C?

Dogmeat [img]/images/graemlins/spade.gif[/img]

[/ QUOTE ]
Yea, that's exactly what I'm saying. Say your gross winnings are 45k. However, your net after deducting losses, or your take home, is 25k. You get to pay taxes on 45k instead. FWIW, I got this information from Russ Fox, a CPA who is familiar with online gambling and occasionally posts here.

[citanul]

that's odd. when i went to H&R block and paid them a lot of money to do my taxes they said that the standard schedule c type stuff applied. did this rule change in the last 9 months?

[obsidian]

[ QUOTE ]
that's odd. when i went to H&R block and paid them a lot of money to do my taxes they said that the standard schedule c type stuff applied. did this rule change in the last 9 months?

[/ QUOTE ]
Not sure, but this Card Player article seems to echo this:

[ QUOTE ]
This situation is pretty standard in the Upper Midwest. States such as Illinois, Indiana, and Ohio, to name a few, require you to pay tax on your gross winnings, but prohibit any deduction for gaming losses. What an unfair law! The only way to get around it is to file as a professional, which allows you to take the losses off your adjusted gross income, thus substantially reducing your taxable income.

[/ QUOTE ]

[MicroBob]

1. you don't need to be playing full-time to be able to file as a professional. If you really are in the $25k-profit bracket then you can easily argue that you are playing for income and not recreationally...and that you have an expectation of profit with your poker.


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.
I'm not a CPA though and know very little about this stuff so take my opinion for what it's worth.
But I would not go too far out of my way to pay an excessive amount on my taxes.

How many online-gamblers or regular live-casino gamblers do you think actually do it this way? I would argue very few.



Still...the better approach would probably be to just file as a professional imo.


Ed Miller's magazine articles on this stuff in the coming months will probably be worthwhile reading as well.
So keep reading his thoughts on internet-poker and taxes in the mag.

[peregrine]

This is referring to state income taxes, not federal I assume.

[Randy_Refeld]

[ QUOTE ]
[ 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?

Does Illinois not have anything like an IRS Schedule C?

Dogmeat [img]/images/graemlins/spade.gif[/img]

[/ QUOTE ]
Yea, that's exactly what I'm saying. Say your gross winnings are 45k. However, your net after deducting losses, or your take home, is 25k. You get to pay taxes on 45k instead. FWIW, I got this information from Russ Fox, a CPA who is familiar with online gambling and occasionally posts here.

[/ QUOTE ]

I know Russ Fox in real life, he seems very knowledgable.