Quarterly Taxes for Poker Income

[TruFloridaGator]

I have not ever filed taxes for any poker related income. I am interested in filing quarterly taxes. The income is only near $3,000, maybe less. Can I file as a professional? Do I need to itemize sessions? Is there anything different I should be doing? I plan on consulting with a professional, but wanted to hear how it will work.

Thanks

[Rainbow Warrior]

-7200 posts
-"near" $3000 income
-professional
-taxes [haha, quarterly yet]

We're not biting...

[TruFloridaGator]

Was a serious question, I have absolutely no clue about this stuff. What should be my first step? Just go see a pro?

[Reef]

wait so you made $3K in 06 and want to go pro now?

[Skallagrim]

Assuming you have a day job, $3K of extra income is really going to have little effect on your overall tax liability. You may owe a little extra (depending on the amount of your witholding) when you file your return, but it will be small and probably not worth the effort of separate quarterly filings.

As for keeping detailed session records, those are really only needed by those filing as a professional player. You gotta keep records, of course, but the detailed session records the IRS wants are not needed by the average joe.

[Poker CPA]

As a Nova grad, I find it very difficult to help you. But currently you do not have a problem, so relax on the estimated taxes, you met one of the reasons for not filing thus avoiding the interest charges. Just keep good records on 2007 wins and loses. Congrats on the champianships, you have two great coaches. And Rollie is coaching somewhere in FL, a double congrats.

[TruFloridaGator]

Sorry for being so unclear. Here's my situation:
I have already filed last year's(06) taxes(well I have an extension & I will), no poker income, just my summer internship.
I want to file my 07 taxes quarterly, so do I do that after each quarter during the current year? Or next year? I cashed out about 3k this quarter so far. I'm working on compiling my records now.

[Skallagrim]

You say you earned 3K in the first 3 months of 2007...

If this is your sole source of income STOP worrying about quarterlys and taxes and concentrate on your poker game.

If this is suplemental income then my first post is still true. If your that worried PAY someone like PokerCPA to analyze your specific situation and determine what are the costs/benefits of paying quarterlys for you. It probably wont matter that much moneywise, but if you really want to know thats what you need to do...

[Capitola]

Since no one else wants to give you a straight answer, I will.

The "quarterly taxes" you're talking about are actually estimated tax payments. It's not like filing a whole return. You're just paying 1/4 of your estimated taxes for the year each quarter. The form you want to look at is 1040-ES. Go to the IRS website (www.irs.gov), go to Forms & Publications, and look at the form. There's a tax worksheet to estimate your taxes. Given that your income might be low, you might not have to file estimated taxes. The worksheet will help you figure that out.

By the way, the deadline for the first quarterly payment was April 15, but don't sweat it too much. If you have to file quarterlies, just make up that first payment when you can and your penalty will be small.

[Poker CPA]

Gator

If you WANT to pay 2007 quarterly estimated taxes then Capitola's advice is good. Read the instructions and make a decision.

I think everyone else, because its such a simple answer, is saying you do not need to. So invest your IRS tax liabilty in something that might lower your overall tax liabilty. Maybe a new home, condo or townhouse; chicks dig a guy with a plan.

You want a st8 answer; Why in the hell would you want to give the IRS a dime, if you didn't have to. BTW notice the IRS's advice, page 1 middle section, about "Increase your withholding". A personal favorite, a real money maker. As taxes become part of your everyday life, you will learn that the "1040-ES" is anything but st8.

Good Luck

[Poker CPA]

And your first step is, not 1040 ES, but how owning real estate impacts your total tax liabilty. Congrats on the degree, a great first step.

[TruFloridaGator]

Thanks, Capitola, appreciated.
CPA, so are you suggesting I don't pay any taxes? The 3k is just what I have cashed out. I imagine the actual net profit is somewhere near 5k. This is just from playing a few hours a day because I'm in school. I plan on playing full time during the summer starting in May, so I was thinking I'd rather not have to give a large lump sum next tax season, so that's why I was asking about quarterlys.

[Poker CPA]

Gator

"CPA, so are you suggesting I don't pay any taxes?"

In a timing sense, YES.
Legal timing of tax payments or withholding. No crime there.
Just no more than you have to.
But do what you want, but just for the record, whats your own conclusion on the "timing of payments" based on the advice given.

[Poker CPA]

And the real estate part. Downpayment vs IRS estimated payment. YOU NO LIKE. Thats solid tax advice. But what the heck, I'm a Nova grad.

Good Luck

[Fat Nicky]

sorry to hijack, but i didn't wanna start a new thread.

i expect my 2007 income to be much greater than my 2006 income. i paid my estimated tax last week (07) based on the amount claimed on my 06 tax return, 1/4 of the tax I paid in 2006. using this method i won't have to pay interest for an underpayment?? can you confirm this Poker CPA?

[Poker CPA]

Assuming your 2006 income is less than 150,000 and you don't have a paycheck or other income subject to withholding, then you're good to go.

Good Luck and don't forget about the state. If cash flow is a problem; first priority is the state, then the feds.

[Fat Nicky]

[ QUOTE ]
Assuming your 2006 income is less than 150,000 and you don't have a paycheck or other income subject to withholding, then you're good to go.

Good Luck and don't forget about the state. If cash flow is a problem; first priority is the state, then the feds.

[/ QUOTE ]

thanks you sir

[Poker CPA]

In addition Nick you should set aside your estimated 2007 tax liability, that will be due on April 15th 2008. Think i/3 for myself, 1/3 for my business and 1/3 for taxes. I know this can be tough, but its a good idea. At least you're thinking about it, and thats half the battle. If you can read poker books, then read tax books also. Look for authors who have experience in the one of the "Big 4" accounting firms and has a specialty, such as real estate. These books are also tax deductible and very valuable. Chicks love guys with books like this, because you have a plan. And if you have a plan, then you have a future.

Good Luck

[Fat Nicky]

[ QUOTE ]

In addition Nick you should set aside your estimated 2007 tax liability, that will be due on April 15th 2008. Think i/3 for myself, 1/3 for my business and 1/3 for taxes. I know this can be tough, but its a good idea. At least you're thinking about it, and thats half the battle. If you can read poker books, then read tax books also. Look for authors who have experience in the one of the "Big 4" accounting firms and has a specialty, such as real estate. These books are also tax deductible and very valuable. Chicks love guys with books like this, because you have a plan. And if you have a plan, then you have a future.

Good Luck

[/ QUOTE ]

thanks, 07 is my first year filing as a pro and i've been bad w/putting money aside for taxes...i really wanted to pay my full estimated payment for 1st Q, but didn't wanna kill my roll at the same time so I just paid 1/4 of my 06 total tax.

i have read "How to Turn Your Poker Playing Into A Business" and learned a lot. Also read "The Gambler's Guide to Taxes" but that wasn't as helpful as most of the book was geared toward the recreational gambler. Any other books you can recommend?

[Poker CPA]

Tough reads, but any book by Jack Warren Wade. Former IRS collection agent.