Poker Tax Question

[WebGuySteve]

I know this has been discussed before, but, I can not find anything useful using the search function (surprise, surprise) I come to you guys since the STT forum was no help and told me to come here [img]/images/graemlins/laugh.gif[/img]

I have started earning enough money to start claiming income for taxes for 2005. I plan to do this right, or at least more or less right. I have tried to talk to accountants, but they kind of just agree with me, and offer no real advice. What do you guys do, and how is it done?

I have heard that you file as a small business and pay roughly 30%. If I do this, but claim say, 75% of my income, or 50%, what risk, and penalties are there for doing such?

Thanks for any help you guys can give, and feel free to flame away as I know this can get very subjective [img]/images/graemlins/frown.gif[/img]

[blackize]

Huge fines and imprisonment are the penalties. How long the imprisonment is I cant tell you, but expect it to be at least 2 years.

[WebGuySteve]

Yeah, I kinda figured, I was more interested in the right way to do things. Not really sure why I threw in the 50% 75% thing.

[Cactus Cactus]

about claiming- can you claim 75% of your income and say you lost money playing at the casino (poker or blackjack)

How could they trace that

[WebGuySteve]

This is true, but, wouldn't they just see how much is in my bank account, and then I would have no way of showing where this money came from? I think I have come to the conclusion it's best just to file properly, thanks for the reply though!

[pokerlaw]

[ QUOTE ]
I have heard that you file as a small business and pay roughly 30%.

[/ QUOTE ]

the actual rate that you pay is determined by your TAXABLE INCOME for the calendar year (Jan 1 - Dec 31). The amount you pay during the year is an estimate of what you think you will make (do a projection and determine your taxable rate and therefore level of tax and tax owed). If you are under $15,000 or so, the rate is around 10%. If you are at $100,000, you go to 34% or so.


[ QUOTE ]
If I do this, but claim say, 75% of my income, or 50%, what risk, and penalties are there for doing such?

[/ QUOTE ]

Again, this largely depends on how much income you are projecting and what you filed in the prior year - as those are the two main benchmarks for determining penalties and what levels to maintain. They aren't that harsh unless you show fraud/mal intent or something like that.

[Cactus Cactus]

about paying taxes...I've come to known some people in canada, argentina, england and I have noticed that they dont have to pay taxes on gambling earnings. Are we the only country that does have to pay taxes on earnings?

[WebGuySteve]

Yeah, I actually live 10 minutes from canada...go figure, eh?

[WebGuySteve]

Thank you very much for your reply, it was very helpful. I feel much more confident in my local accountant now [img]/images/graemlins/smile.gif[/img]

[Cactus Cactus]

i live about 20 minutes...buffalo NY where do you live at