The Tax Man Cometh

DDBeast · #1 12-13-2005, 08:01 PM

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

SomethingClever · #2 12-13-2005, 08:22 PM

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.

DDBeast · #3 12-13-2005, 09:05 PM

I'm in Texas.
One more question, how are tournament wins reported? Is it the same column of income and losses?

TheMetetron · #4 12-13-2005, 09:51 PM

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.

popeye18 · #5 12-13-2005, 10:08 PM

[ QUOTE ]
You are going to get raped if you don't file as professional and get auditied.

[/ QUOTE ]

?

TheMetetron · #6 12-13-2005, 11:58 PM

[ 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.

XChamp · #7 12-14-2005, 12:14 AM

I thought in order to be a professional gambler you had to demonstrate that it was your primary form of income for at least 2 years...I guess I'm wrong?

edit- typos

krishanleong · #8 12-14-2005, 08:38 AM

Everything Metetron has said is right on target. I have worked with a financial advisor and CPA as well.

Krishan

TStoneMBD · #9 12-13-2005, 10:53 PM

?

ChristinaB · #10 12-14-2005, 11:16 AM

[ QUOTE ]
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.

[/ QUOTE ]

Yes, definitely file as a professional. Don't fool yourself into thinking that because you may be a full time student or something else (you didn't specify) that your $60K income almost all from poker can somehow be qualified as casual income.

They can penalize you big time for avoiding FICA taxes too. Start doing it right from the start, you won't regret it. There are grey areas between professional and casual - but you are not in one - you are a professional.