Tax return question

[coffeecrazy1]

Due to me being in school most of my life, and my dad enjoying the tax break from having a dependent, I will be filing a return the first time next year.

The salary I get from my job will be easy enough to calculate, but I have a question regarding poker winnings...

I anticipate being in the black on poker for the year, but I know that the typical way to report is to write your total winnings in, then deduct your total losses. Would it be problematic to simply declare your profit as income, and list no losses as a deduction?

I apologize for such a noobish question, and I'm sure I'm probably overlooking a basic mathematical concept in the process, but I think one of you can answer it better than I can research it.

might lose you some loot

[Luv2DriveTT]

No. You cannot list the net winnings. You must list the gross winnings and the gross losses separately (which if you add them together give you your net winnings anyway).

On a related note, you probably won't want to claim the standard deduction if you are reporting gambling winnings, otherwise you cannot deduct your losses.

TT [img]/images/graemlins/club.gif[/img]

[coffeecrazy1]

Interesting...I will have to look into what deductions I took on my paycheck(I recall it was as many as possible) to avoid that problem.

Also...it will all depend on whether or not my profit for the year is significant enough to report...I mean, would it be an issue to not report $500 or so?

[JPinAZ]

The deductions on your paycheck have nothing to do with itemized deductions you take on your tax return. The standard deduction for 2005 is $5,000, so if your total itemized deductions (including your gambling losses) are less than that then you can't itemize.

[coffeecrazy1]

I see...

Methinks I should buy a Tax for Dummies book or something, just so I don't feel quite so lost.

Thanks for the help on this.

[Kurn, son of Mogh]

Would it be problematic to simply declare your profit as income, and list no losses as a deduction?

IRS publication 529 specifically forbids reporting the net of wins and losses as income. All wins must be reported as income on form 1040 and all losses must be reported as an itemized deduction on Schedule A.

Unless you've got large winnings that generated an IRS form(s), you may not have a problem.

<ul type="square"> [img]/images/graemlins/wink.gif[/img][/list]
(I am not a CPA or tax advisor, but I did spend a couple of nights in a Holiday Inn last week.)

[Luv2DriveTT]

[ QUOTE ]
The deductions on your paycheck have nothing to do with itemized deductions you take on your tax return. The standard deduction for 2005 is $5,000, so if your total itemized deductions (including your gambling losses) are less than that then you can't itemize.

[/ QUOTE ]

I was told it was 7K as of 2005. I don't know if my information is correct, just pointing it out.

TT [img]/images/graemlins/club.gif[/img]

[coffeecrazy1]

I had that thought, actually...but I don't want to get audited my first time out of the box. Any thoughts along these lines from folks who are wise in the ways of the evil tax?