Gambling Taxes (state and city)

[Jellyroll]

Hey all,

I have a question, somewhat related to my post a few down, but different. I just sat down tonight with my logs and figured out my session wins and losses. I came up with roughly the following:

Winning session total: $32,000
Losing session total: -$27,000

This equates to a net gain of +$8,000 for the 2004 year

Now, I go to fill out my taxes and am horrified to find that I not only have to pay the 27% or so on federal taxes, but that my state and city taxes both want 4% (state) and 3% (city) of my Adjusted Gross Income (job salary + $32,000) and not my Taxable Income (job salary + $32,000 - $27,000).

This ends up equating to the following taxes:

Federal
.27 x ($32,000 - $27,000) = $2,160

State
.04 x $32,000 = $1,280

City (Detroit)
.03 x $32,000 = $960

Total:
$4400 due on $8,000 of poker winnings (55%)

Ahhh!! Can this possibly be right? It doesn't seem right that my state and city taxes are taxing my gross income, and not my federal "taxable income" -- Am I missing something? Could someone who has done this before point out what I am missing, or confirm what I don't want to hear?

Thanks,

JellyRoll

[Uglyowl]

Don't know enough to answer/. Sorry

[Bubu]

I think some states/cities allow you to deduce your gambling losses.

[Uglyowl]

Put down the net and that should be good [img]/images/graemlins/smile.gif[/img] That is the spirit of the law I would think. Otherwise the old cigarette smoking slot players would owe a ton of money even though being losing players. Think about it.

Or you win $700 on scratch tickets and lose $1000 and you owe the state money... BS

[slickpoppa]

Sorry, I don't have the answer to this question. But while we're on the subject: I have lived in 3 different cities and states over the past year, so where do I pay city and state taxes on my poker earnings and how much? For example, let's say I made 10,000 on poker while in state A, and then moved to State B (somewhat permanently) and made another 10,000. Do I pay all of the money to state B? Anyone?

[Jellyroll]

I just read this:

Michigan.gov

This could be bad news for me.

[slickpoppa]

If that is true, that is f*cking horsesh*t

[Shoe]

If you file as a professional gambler, you only need to report your net winnings on your federal income tax return.

Check their site to make sure that you would qualify though, I don't know what the conditions are off the top of my head.

[liquidboss]

[ QUOTE ]
I just read this:

Michigan.gov

This could be bad news for me.

[/ QUOTE ]

Yeah, that is tough... Makes me glad I have no state income tax.

[Jellyroll]

Yeah, I read into that. But I do not think I could qualify, mainly because it is not my full time job. Also, I don't think you can file as a professional gambler if you haven't already established a record of wins for a few years.