Taxes question

[AceHiStation]

When should I start looking into an accountant and when do i need to file by?

I'm a newbie and have never filed my own taxes before.

[iceman5]

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When should I start looking into an accountant and when do i need to file by?

I'm a newbie and have never filed my own taxes before.

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Well, Im not an accountant and I have never used one so I cant answer the 1st question. The filing deadline is April 15th. You arent serious that you didnt know that are you? You might be the only American adult that didnt know that. [img]/images/graemlins/smile.gif[/img]

[scrapperdog]

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You may also deduct your losing sessions if you do not take the standard deduction - but only up to amount of your winning sessions.

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We cant take the standard deduction and deduct our losing sessions?

I would love for a cpa or tax expert to do an in-depth gambling winnings tax faq and have it stickied.

[iceman5]

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You may also deduct your losing sessions if you do not take the standard deduction - but only up to amount of your winning sessions.

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We cant take the standard deduction and deduct our losing sessions?

I would love for a cpa or tax expert to do an in-depth gambling winnings tax faq and have it stickied.

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You have to itemize deductions in order to write off losses

[Schwartzy61]

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Does the fact that he is in college affect anything?

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Not really, but if he's paying for his college education upfront he gets some nice deductions/credits.

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

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Yes, this would be my recommendation

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

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Definitely. Basically it's 40k vs. 10k.

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Does being a dependant change any of his tax liability?

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Unfortunately for him he loses his personal exemption, his parents get it instead. So his taxable income is a few thou higher than it could be.

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

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No, the IRS doesn't take that into consideration. They have certain things they flag as unusual and act accordingly.

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

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Well, nobody knows. This type of question hasn't really been defined well for B&M play, let alone online poker. Best way I've seen it defined is one continuous block of time devoted to one activity. So if you login to Party and sit down at 4 Hold'em tables and play for 4 hours. That's 1 session. However, separate games would get their own session. So even if you play them simultaneously, if you play 2 tables of HE and 2 of Omaha, I would treat each of those games as separate sessions. But different limits within a type of game wouldn't get their own sessions, if that makes sense. In the end however, the IRS could step in and say time spent at every different table is a session.

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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?

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Not sure, would have to check his state's tax code.

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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?

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Wow good question. Technically you should pay city taxes on the money where it was earned. I live in a city that doesn't have a local income tax so I don't have to worry about this. First I would check with each city (college, presumably where he earned some of it, and his hometown to see if they even have an income tax).

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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.

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You don't want answers, but I answered it anyway for the guy's benefit. My advice is always to seek a professionals help, or at the very least plug that crap into TurboTax and let it ride baby!!! When seeking a pro's help however, it does help to have some knowledge about your situation, so that you can thoroughly question him. In the end that pro you decided to meet with may know about as much as you do when it comes to a lot of these gambling situations...

[Schwartzy61]

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You may also deduct your losing sessions if you do not take the standard deduction - but only up to amount of your winning sessions.

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We cant take the standard deduction and deduct our losing sessions?

I would love for a cpa or tax expert to do an in-depth gambling winnings tax faq and have it stickied.

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You want an FAQ on Gambling taxes?

Check out:

The Gambler's Guide to Taxes, written by Walter L. Lewis, who just happens to be a CPA.

[Chadt74]

"We cant take the standard deduction and deduct our losing sessions?"

No if you use the standard deduction you can not itemize.

The reason CPAs do not post stickies is that this is a very specialized part of the law/tax code where there are many gray areas and each case probably has to be reviewed on their own basis. If you search there was some pretty detailed information last year that had a few CPAs giving their veiws on tax issues.