Taxes question

[AceHiStation]

Hey guys, sorry cause I"m sure this has been done before, but here goes...

I was wondering what a non-professional poker player needs to do about taxes. Lets say I'm up 50K for the year, but only have withdrawn 25K of that money. When do I need to pay taxes. Should I claim money in my partypoker account, or just money I've cashed out? Any other advice?

Thanks,
-Ace

[Niediam]

Assuming you live in the US...

You need to pay taxes on all your winning 'sessions' even if you have yet to take the money out of the poker site or neteller. You may also deduct your losing sessions if you do not take the standard deduction - but only up to amount of your winning sessions.

[popeye18]

Ok so say i have 40k in winning sessions and 30k in losses, for a net profit of 10k. If i declare properly(and put the 40k as wins, and then have the 30k as deductions) how much am i looking at paying? Im 20, full time student, a dependent, and poker was my only income in 2005. Thanks.

[Niediam]

You most definately want to speak to a CPA/tax lawyer.

[iceman5]

[ QUOTE ]
Ok so say i have 40k in winning sessions and 30k in losses, for a net profit of 10k. If i declare properly(and put the 40k as wins, and then have the 30k as deductions) how much am i looking at paying? Im 20, full time student, a dependent, and poker was my only income in 2005. Thanks.

[/ QUOTE ]

You dont need an accountant. Turbo Tax handles it just fine. You already know that you need to seperate your wins and losses. You dont need an accountant to do the math for you.

[popeye18]

[ QUOTE ]
You dont need an accountant. Turbo Tax handles it just fine. You already know that you need to seperate your wins and losses. You dont need an accountant to do the math for you.


[/ QUOTE ]

Well my father is very knowledgabke when it comes to taxes so i plan to use him. Im just curious if anyone has an idea on how much ill owe.

[Schwartzy61]

[ QUOTE ]
[ QUOTE ]
You dont need an accountant. Turbo Tax handles it just fine. You already know that you need to seperate your wins and losses. You dont need an accountant to do the math for you.


[/ QUOTE ]

Well my father is very knowledgabke when it comes to taxes so i plan to use him. Im just curious if anyone has an idea on how much ill owe.

[/ QUOTE ]

Did you have any other job during the year?

If poker was your only source of income I would definitely file as a professional.

I'm not sure of the exact tax rates for 2006, but the lowest brackets are generally 10 to 15 percent. So depending on your deductions and credits I would expect to owe around $500 if you haven't paid any tax into the system.

[Niediam]

Does the fact that he is in college affect anything?

Could he file a secedule C because it's his sole source of income?

If he can, would it be wise to do so?

Does being a dependant change any of his tax liability?

Would having a professional tax prepairer redue the chances of him being audited?

By the way, how do you define a session? [img]/images/graemlins/smile.gif[/img]

What about state tax liability? Some states don't allow you to deduct any gambling loses. Is there a way around this for his state?

Does he owe any city taxes? Would that be the city he lives in for college and earned the money or the city where his parents live?

I don't really want answers to any of these questions. [img]/images/graemlins/smile.gif[/img] I'm just trying to point out that gambling tax situations are often very complicated and for most people talking a professional is much better than any 'do-it-yourself' method.

[Niediam]

If he is very knowledgable about taxes then why dont you give him a quick call? [img]/images/graemlins/smile.gif[/img]

[iceman5]

There are too many other factors for any of us to be able to answer that.