tax questions

[Dave2020]

I have a few questions and would greatly appreciate any help in answering them...

1 - Roughly 85 to 90 percent of my income in 2006 came from online poker; the rest came from working for a friend in the construction business. Am I REQUIRED to file as a pro using schedule C?

2 - If I file as a pro it will be my first time filing this way. I have not payed any quarterly taxes on my 2006 income because I was unaware of my responsibility to do so. Can I avoid a penalty on the basis of not having any previous records to base quarterly payments on?

3 - If I don't file as a pro, am I still obligated to have already made quarterly payments?

Thanks!

[cardcounter0]

1 - Roughly 85 to 90 percent of my income in 2006 came from online poker; the rest came from working for a friend in the construction business. Am I REQUIRED to file as a pro using schedule C?

No, but you miss out on a lot of deductions if you don't.

2 - If I file as a pro it will be my first time filing this way. I have not payed any quarterly taxes on my 2006 income because I was unaware of my responsibility to do so. Can I avoid a penalty on the basis of not having any previous records to base quarterly payments on?

See a CPA. I assume you had withholding done on your other pay, so technically you have been paying taxes all along, you might be covered.

3 - If I don't file as a pro, am I still obligated to have already made quarterly payments

See above.

[Dave2020]

Thanks for your response cardcounter0...
The reason I'm so concerned with the first question is that, as an online player, i don't see myself being able to take advantage of very many deductions. In my estimation, the SE Tax will hurt me more than missing out on any extra deductions. It seems to me that filing as a pro is only more beneficial if I have made well over $100,000 and/or I can claim a ton of deductions. Does this sound right?

[cardcounter0]

[ QUOTE ]
In my estimation, the SE Tax will hurt me more than missing out on any extra deductions. It seems to me that filing as a pro is only more beneficial if I have made well over $100,000 and/or I can claim a ton of deductions. Does this sound right?

[/ QUOTE ]

Sounds about right. Of course you deduct half the SE tax you pay, so it is not that bad a hit. I think the break even point starts happening at around 80k of income. Again, get a CPA. You probably have deductions you are not even thinking about like the cost of your computer, etc.