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#1
12-13-2005, 08:01 PM
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The Tax Man Cometh
I didn't have to pay taxes last year, and this year I've made about $60K from online poker. I haven't had to worry about income over $2K until this year.
Is it pertinent to get a CPA? How the hell do I find one who's familiar with this, or do I have to settle for less? From what I hear, you definitely don't want to file as a professional gambler because of the additional S.S. tax. Rather, I should list my income and then put in losses as itemized deductions? Any extra info would be greatly appreciated. Here's a helpful link for others: Online Gambling & Taxes 
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#2
12-13-2005, 08:22 PM
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Re: The Tax Man Cometh
Getting a CPA would be good.
Yes, if possible, you can avoid the self-employment tax by not filing as a professional. A CPA can help you determine if this is in your best interest. What state are you in? If you're in Oregon I can refer you to someone.
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#4
12-13-2005, 09:51 PM
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Re: The Tax Man Cometh
You are going to get raped if you don't file as professional and get auditied.
Filing as a professional does have its advantages, however.
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#7
12-13-2005, 11:58 PM
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Re: The Tax Man Cometh
[ QUOTE ]
[ QUOTE ] You are going to get raped if you don't file as professional and get auditied. [/ QUOTE ] ? [/ QUOTE ] What's the question? If it is your main source of income, the IRS is going to conclude very easily that you were self-employed and should have reported the income via Schedule C. When they see you didn't do this, you are going to owe the extra tax + penalties + interest... the penalties aren't small and the interest is at the highest rate they can justify. And this is if they conclude that you didn't do this intentionally. If they think you were intentionally evading taxes, the penalties get absolutely huge or you go to pound-you-in the ass prison. Good luck with that one.
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#9
12-14-2005, 12:30 AM
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Re: The Tax Man Cometh
Well i know ill probably get jumped on big time for this. But i have been filing my poker winnings in the other income section of my return for 3 years and the irs seems to be ok with that. Since i only play online and am a winning player, there are no losses to deduct(some people will really have a problem with that, but i think its reasonable and also legal under current tax code.) The IRS has gladly been accpeting my money with no problems and even sends me quarterly filing papers to make it easy to continue to pay. I think if ur not comfortable with the situation get a CPA, but the IRS is reasonable as long as you make a good faith effort to pay the taxes on the money you earn. I think if you file as unemployed or student or w/e and list your winnings in other income this is well within the boundries of the law(read the link in the first post it talks about doing this). If i ever had any substantial losses live or w/e i would deduct these.
I also doubt the IRS is going to try and make you file as a professional. They have been fighting for years to try and keep this from being possible going all the way to the supreme court.(Again the linked article section 3) For these reasons i dont think its mandatory to file as a proffessional if you dont want to(and mainly to avoid the 15.3% self employed income tax). I realize there are disadvantages to this(namely the inability to write off expenses) but i doubt there can be a huge difference one way or the other frankly. Just my 2c
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#10
12-14-2005, 12:36 AM
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Re: The Tax Man Cometh
Wichita did you have a primary source of income that you were also reporting? For the average person, with no state tax, reporting your winnings in a lump sum..where do you list them? What percentage does this fall under? If you are still claimed as a dependent by you single parent but you will probably make more than them in the next year this is probably a problem right?
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