Quick tax question. . ..

[Acesover8s]

Don't want to start another long thread, but I can't seem to find anything about this.

Assuming I have no W2 income this year, do I have to file as a professional (schedule C)? Assuming I don't have to, will it raise a bunch of flags that I am claiming a large some of gambling winnings while not holding a job?

Thanks,
Aces

[PuppetMaster]

bump

[CrackerZack]

Search NVG. I think a few people went back and forth on this. I do not know the answer though.

[DaPlaya]

I think in your case, you may not actually need to file at all. If you have no other income that produced any W-2's last year, you may want to look at the minimum income filing requirements.

I advocate everyone pay their taxes, but if someone only earned $7,000 or less, they need not even file. If you earned more, how much are you going to report anyway? I have a regular job, so it is a non-issue for me. What I have seen around me is that players that have no W-2's rarely report their actual income.

This $7,000 is a guess based on the fact that it was $6,700 two or three years ago. Please check the current figure.

The idea would be to avoid the red flag by not filing at all. If your total income you plan on reporting is at or under this figure, it is probably best to not file. The non-filing may even help if you were ever audited. Many people that REALLY make less than this, rarely file, because they are rarely taxed. Those that are taxed file only to get those taxes refunded.

Can you show that your annual expenses were under $7,000 in 2003? If so, put it pen and paper now.


This would come up only in the future, because people who don't file for 2003 can't get audited for 2003. It would be an issue for a subsequent audit, if at all.

[ThePinkBunny]

For last year I only had a little taxable income besides gambling winnings.

I just filed and filled in gambling winnings without W-2G, and paid the taxes on it.

Check out the Trailer for PIZZA: The Movie at www.pizzathemovie.com

[jasonHoldEm]

Hi Aces,

I'm meeting with my accountant tomorrow to ask a variety of similar questions. I'm planning on making a post once I get some answers, I'll do my best to get your questions answered as well (although obviously it might vary by location, etc).

Peace,
Jason

[webiggy]

[ QUOTE ]
I think in your case, you may not actually need to file at all. If you have no other income that produced any W-2's last year, you may want to look at the minimum income filing requirements.

I advocate everyone pay their taxes, but if someone only earned $7,000 or less, they need not even file. If you earned more, how much are you going to report anyway? I have a regular job, so it is a non-issue for me. What I have seen around me is that players that have no W-2's rarely report their actual income.

This $7,000 is a guess based on the fact that it was $6,700 two or three years ago. Please check the current figure.

The non-filing may even help if you were ever audited. Many people that REALLY make less than this, rarely file, because they are rarely taxed. Those that are taxed file only to get those taxes refunded.



[/ QUOTE ]

I am a CPA and I would say that this is really poor advice. Actually, if you have filed in previous years and choose not to file this year, you are puting yourself at greater risk to be flagged by the IRS. Also, by not filing, you fail to start the clock on the statute of limitations meaning that the IRS can audit you and levy penalties for failure to file and underpayment of taxes along with interest on back taxes should any be owed, until you die. My feeling is file the return, disclose your gambling earnings, deduct you losses, to the extent you have them and to the extent they exceed your standard deduction and let them decide as to whether you need to be audited. At least if you file, the statute of limitations clock cen get started and after 3 years, they can't come after you.

Never worry about an audit if you have nothing to hide. Keep good records and provide reasonbly accurate information, because the burden of proof is on the tax payer. Also, I don't believe that you need to file this on a schedule C for self employment. You can treat it purely as gambling winnings, but you might end up passing up the opportunity to deduct certain related costs associated with your gambling earnings. Please note, I am NOT a tax expert (only 10% of the CPA exam deals with taxes). Having said that, this info is pretty standard. Even so, you should really consult with a professional tax advisor who doesn't work for H&R Block and who has a CPA license.