Better to just claim "other income", not "gambling income", on 1040?

[sports_quant99]

I'm wondering (since claiming gambling income raises your audit risk from 1% to 2%), is it better to just claim it as "other income" on the 1040?

I only have a small amount of gambling losses which would go on Sched A, and i'm willing to forego those offsets.

Thanks!

[plasphemy]

Line 21 Other Income has a requirement to fill in the type of income or attach a statement.

If you leave it blank, I would assume that would raise your audit risk even more. In fact, they may even have a method of requesting the type of income if you don't list it.

[Ron Burgundy]

If you're really afraid of a 1% increase of an audit (where the eff did you get that number, BTW?), I would suggest you stop cheating on your taxes so that an audit wouldn't be a problem.

[ericp42]

[ QUOTE ]
If you're really afraid of a 1% increase of an audit (where the eff did you get that number, BTW?), I would suggest you stop cheating on your taxes so that an audit wouldn't be a problem.

[/ QUOTE ]Audits suck for non-cheaters too. How many hours do you spend with Jehovah's Witnesses when then come to your door? Why would anyone want to spend time with a charming IRS bureaucrat if they can avoid it?

[Zele]

It's worth noting that most audits are not face-to-face (I think it's 20%.) Not that correspondence audits don't suck too.

[fleece_me]

[ QUOTE ]
If you're really afraid of a 1% increase of an audit (where the eff did you get that number, BTW?), I would suggest you stop cheating on your taxes so that an audit wouldn't be a problem.

[/ QUOTE ]

umm 1% to 2% is a 100% increase

it is a question worth asking "how can I decrease my chance of audit".

Good job not using math a 5th grader would know to dismiss a valid and worthwhile question.

[sports_quant99]

How about this idea? Put something like "statistical analysis consulting income"...which is not a lie, and does not raise audit risk?

[BigAlK]

[ QUOTE ]
How about this idea? Put something like "statistical analysis consulting income"...which is not a lie, and does not raise audit risk?

[/ QUOTE ]

A consultant would be a business and required to fill out sched C. IIRC, the specific types of income that are supposed to be put on line 21 are outlined in the instructions. I'm sure there are exceptions, but if what you put isn't at least in the spirit of the items they list it probably belongs somewhere else. I don't think showing gambling income is going to increase your audit risk as much as what you might do to make it appear to be something else might. Also if you had any winnings where you received a form W2-G and you don't categorize it as "gambling winnnings" or similiar you're begging for an audit.

[sports_quant99]

No W2G's, but you raise a good "workaround"...just claim it as Schedule C income.....hmmmmmm

[BigAlK]

[ QUOTE ]
No W2G's, but you raise a good "workaround"...just claim it as Schedule C income.....hmmmmmm

[/ QUOTE ]

Using schedule C is "filing as a professional." If you've got other income that may or may not be a good idea. It has the added disadvantage of having to pay self employment tax. On the positive side offsetting wins with your losses plus any other valid expenses is a no brainer.

[sports_quant99]

Yup, that sounds good...i'll file as a "statistical analysis consultant", or "event forecaster", or something like that.

[ChipFerFree]

Gift Income... No questions asked if under 10k...

[Parlay Slow]

[ QUOTE ]
Gift Income... No questions asked if under 10k...

[/ QUOTE ]

lol if you got audited they'd ask who the gift was from and expect to see a corresponding financial transaction

[iron81]

[ QUOTE ]
[ QUOTE ]
Gift Income... No questions asked if under 10k...

[/ QUOTE ]

lol if you got audited they'd ask who the gift was from and expect to see a corresponding financial transaction

[/ QUOTE ]
I guess you could link the IRS to your BBV threads.

[Russ Fox]

[ QUOTE ]
Gift Income... No questions asked if under 10k...

[/ QUOTE ]

That won't work because gifts are not taxable to the recipient. If I give you $10,000, there are no tax implications at all. Indeed, only the giver of a gift must worry about taxes, and that's just the gift tax. (If you give someone more than $12,000 (2006 & 2007 number), a gift tax return must be filed. It's very unlikely that any tax will be owed because of the lifetime exemption.)

(For the record, if you receive a gift that pays interest, you become liable for the interest income.)

-- Russ Fox