Taxes and College Financial Aid

SmileyEH · #1 10-04-2004, 01:26 AM

I go to a small liberal arts school (Amherst College) in New England, and I'm on significant financial aid (still not enough though lol). I've been making fairly decent money in the last month or so, and I expect to take down around $1000-$1500 a month during the school year.

Question 1) Would anyone recommend hiding this income from the IRS and my school's financial aid dept?

Question 2) If I do (most likely) declare this income, does anyone have any idea how much will be simply taken away by the financial aid dept (eg. cents on the dollar)?

I don't really feel comfortable walking into the financial aid dept. to ask what I should do about the $20k I expect to make playing poker in the coming year, and I figure there must be some college students out there in similar situations.

thanks,

-SmileyEH

gonzo787 · #2 10-04-2004, 01:44 AM

I'm beginning to think that the worst thing about poker is winning. [img]/images/graemlins/smile.gif[/img]

bicyclekick · #3 10-04-2004, 02:27 AM

[ QUOTE ]
I go to a small liberal arts school (Amherst College) in New England, and I'm on significant financial aid (still not enough though lol). I've been making fairly decent money in the last month or so, and I expect to take down around $1000-$1500 a month during the school year.

Question 1) Would anyone recommend hiding this income from the IRS and my school's financial aid dept?

Question 2) If I do (most likely) declare this income, does anyone have any idea how much will be simply taken away by the financial aid dept (eg. cents on the dollar)?

I don't really feel comfortable walking into the financial aid dept. to ask what I should do about the $20k I expect to make playing poker in the coming year, and I figure there must be some college students out there in similar situations.

thanks,

-SmileyEH

[/ QUOTE ]

I guess I don't really know you or your poker stage, but I wouldn't base you're yearly take from 1 successful month.

Nightwish · #4 10-04-2004, 02:53 AM

I don't know what your college's policies are, but it's quite possible that if they find out that you knowingly lied on your financial aid application, they will expel you. That's about as -EV as it gets.

Michael Davis · #5 10-04-2004, 03:14 AM

Do what you want. It's really an ethical issue and nobody can decide that for you.

Without considering ethics, you should probably hide the money and not pay taxes on it. The chance you get caught is minute these days, especially while you are a student. Unless you start pulling in ridiculous jack and making it obvious at financial institutions and such.

-Michael

RiverMel · #6 10-04-2004, 07:21 AM

You realize you have to count every "up session" as part of your gross income. Then you deduct the "down" sessions from your adjusted gross income. That means if you have 500 sessions up $100 each time, poker adds $50,000 to your gross income... even if you have 500 sessions down $100 each time. You still have to tell your financial aid department your gross income was $50,000--even though you "broke even." They don't care about the gambling losses you want to deduct.

cjs · #7 10-04-2004, 08:54 AM

If he reports 50,000 as income he can kiss any financial aid goodbye. They do not take deductions into considersation when doing your FFASA. You are screwed either way.

elwoodblues · #8 10-04-2004, 10:14 AM

[ QUOTE ]
It's really an ethical issue and nobody can decide that for you.

[/ QUOTE ]

It's really a legal issue. If you don't want to make money because you are afraid you will lose your financial aid...don't make money. If you make 50k/year you shouldn't be getting financial aid.

SmileyEH · #9 10-04-2004, 12:51 PM

Thanks for the replies all. I received a PM shortly after posting telling me that the financial aid formula will expect 35% of my earnings be dedicated toward school...thus my package will be adjusted accordingly.

As I expect to use the vast majority of my earnings to pay for school, I think I will keep playing fairly seriously to help my parents out with the burden.

Also, while my results are only over the last month and a half I'm certain that they have statistical significance (+200 SNG's with ROI ~40%). I could be running well meaning my estimated monthly earnings could be off by at the most 40%. In any case, even at that rate about half of my tuition should be covered.

-SmileyEH

RiverMel · #10 10-04-2004, 03:52 PM

My point exactly.