Taxes! MUST one File as a Professional if they Fit the Bill?

[Joeflex]

Question for all you pros.

Basically the question is- MUST successful full-time gamblers pay self-employment tax?

Well all you "pros" out there know there are two ways to file. As a Professional and use Schedule C OR claim the income above the line and then deduct on Schedule A below the line. Twenty years ago, Groetzinger was fighting to get some respect for the gamblers and be able to deduct expenses just as any business. But interestingly, being recognized as a pro these days just isn't what it once was because being a professional gambler for online players is far different. Back in the day a gambler would have tons of expenses- think of a touring professional who would have flights, meals, hotels. An online player today- what can he deduct? Okay, you get your computer one time, get a home office deduction, your internet bill- all that is worthless when faced with the obvious downside to being a pro- the nasty 15% self-employment tax.

And now, the IRS is trying to force people to be self-employed by sending out deficiency letters! Anyone know of any court cases that address whether a gambler can ELECT to be a pro or not, or whether self-employment can be imposed upon them?

Then again, being a pro may still be better as I'm not quite sure about the ramifications of filing Schedule A/then deducting. I guess it all depends on what a session is .


Joeflex