Just got off the phone with my new CPA...

signal · #1 08-26-2005, 02:07 PM

... if I decide to hire this guy.

Like many other posters here, I've been accumulating winnings and now comes for the time of thinking toward tax time.

I went to a resource like this one .

So I explained over the phone my situation and the guy said he will be able to prepare my taxes.

He also said that I should be setting aside enough winnings to cover the taxes; I told him I keep records and do not touch any of my winnings. He said fine.

He also said as a maximum 50% of my winnings could be taxed but most likely 25% will go to federal and 5% to state (I'm in massachusetts). What is the best way to make sure that the CPA follows the laws but at the same time saves me as much as can be saved? I am flying blind on this one. (I thought there was a book on this subject... I will search if I find it I will post it).

Is this along the lines of other people's experiences?

This is my first attempt at acquiring a CPA and I would appreciate it if other more knowledgeable people could provide some additional pointers.

* I asked if he's dealt with gambling winnings before and he said of course there are many avenues for gambling in and around Massachusetts.

* His quote is ~ $250

Is there anything else I should be telling the CPA or making sure he's aware of? (I ask this since some people say there are some idiot CPAs out there; one thing is for certain this guy asked for records for each session so it seems he is correct to be on the thorough side....)

So he told me to check back in during end of November beginning of December and then we can set up a plan for April.

MicroBob · #2 08-26-2005, 02:15 PM

gamblers guide to taxes by walter lewis is okay (at least gives you a solid foundation).

signal · #3 08-26-2005, 02:16 PM

cool thanks. I knew there existed a book like that.

As Zehn · #4 08-26-2005, 02:21 PM

Why wait till April? If you are subject to estimated payments all you are incurring is additional penalties and interest from underpayments (depending on how much your winnings are). If your income is increasing significantly you can protect yourself by having enough withheld to cover either 100% or 110% of last years tax liability. Waiting till November or later might not give you enough time if this is an option.

If you do not have W-2 wages or other avenues where taxes are routinely withheld, you should start making estimated payments if required.

Tilt · #5 08-26-2005, 02:21 PM

As of an area of taxation, its not exactly rocket science. Any CPA should be able to handle gambling winnings without too much trouble.

signal · #6 08-26-2005, 02:30 PM

Hi Zehn,

The CPA went over this with me. He asked my total winnings and what my tax situation was for last year. Based on my responses he said I could file the quarterly estimate or wait until April. I chose the latter for simplicity.

MicroBob · #7 08-26-2005, 02:32 PM

I've seen posts on here from people who had a CPA tell them that it's not even possible to file a schedule-C as a 'professional' gambler.

not all CPA's are created equally.

There are MANY CPA's who are pretty incompetent out there from what I've read around here.
However, an open-minded CPA who pages through Gamblers Guide to Taxes just to figure out what their client is talking about (in case they've never heard of it before) should be able to do it VERY easily.

I also agree with the previous poster....if you are making that much money regularly you should probably be paying your estimated quarterly taxes.

Uglyowl · #8 08-26-2005, 02:35 PM

CPA is really just a distintintion to enable you to audit companies and put your stamp of approval on them. While most do taxes as well since there is a bunch of money to be made doing so.

That being said there are some tax prep certification out there and those probably provide a better clue as to who is good or not in this area.

While CPA is the thought to be the "gold standard" when it comes to taxes it is not. The CPA title has 0 to do with tax prep and 100% with auditing financial statements.

CORed · #9 08-26-2005, 02:43 PM

This is not correct. Yes, CPA's also do audits, both for corporations and local governments, but taxes are a major part of their business and one of the four parts of the CPA exam is devoted to taxes. As in any profession, I'm sure some are better at taxes than others. In most states, anybody can hang out a shingle and call themselves a tax preparer. A CPA at least has had education and passed an exam in the field.

Tilt · #10 08-26-2005, 02:56 PM

All I am saying is its not a very complicated area of taxation. Sure, there are bad CPAs out there who won't do the 10 minutes of necessary homework. But a decent CPA is routinely handling much more complicated issues dealing with passive gain/loss rules, partnership taxation, foreign income, etc. Gambling winnings are actually pretty straightforward in comparison, though it is an obscure issue.