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This should end all of the false claims about paying US taxes on poker
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#2
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Re: This should end all of the false claims about paying US taxes on poker
This one doesn't make sense:
"Myth #6. I can net my wins and my losses. Unless you’re a professional, the sum of your winning sessions are Other Income (line 21, Form 1040); your losing sessions, up to the amount of your winning sessions, are an itemized deduction taken on Schedule A. Professionals do get to net their results and file using Schedule C (Profit or Loss From Business). Professionals, though, must pay self-employment tax on their net income, at 15.3% of the first $94,000 of net income, and 2.9% above this (2006 numbers). While half of the self-employment tax is a deduction (line 27 of Form 1040), unless the professional earns a substantial six-figure income, he can pay more in tax." So say a player plays ~5/10 NL 500,000 hands in year. Is he supposed to declare that he won $4,000,000 and lost $3,500,000? That is just rediculous. How the heck would you even keep track of all this? I mean yea you might have PT, but when you play on a different computer/different site? |
#3
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Re: This should end all of the false claims about paying US taxes on poker
Our tax code isn't exactly a shining example of common sense....
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#4
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Re: This should end all of the false claims about paying US taxes on p
[ QUOTE ]
This one doesn't make sense: So say a player plays ~5/10 NL 500,000 hands in year. Is he supposed to declare that he won $4,000,000 and lost $3,500,000? That is just rediculous. How the heck would you even keep track of all this? I mean yea you might have PT, but when you play on a different computer/different site? [/ QUOTE ] This is not difficult. You bust out a little program called Excel and record the results of every session on every site. I keep track of time played, beginning balance and ending balance for the session. Very simple. |
#5
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Re: This should end all of the false claims about paying US taxes on poker
[ QUOTE ]
This one doesn't make sense: "Myth #6. I can net my wins and my losses. Unless you’re a professional, the sum of your winning sessions are Other Income (line 21, Form 1040); your losing sessions, up to the amount of your winning sessions, are an itemized deduction taken on Schedule A. Professionals do get to net their results and file using Schedule C (Profit or Loss From Business). Professionals, though, must pay self-employment tax on their net income, at 15.3% of the first $94,000 of net income, and 2.9% above this (2006 numbers). While half of the self-employment tax is a deduction (line 27 of Form 1040), unless the professional earns a substantial six-figure income, he can pay more in tax." So say a player plays ~5/10 NL 500,000 hands in year. Is he supposed to declare that he won $4,000,000 and lost $3,500,000? That is just rediculous. How the heck would you even keep track of all this? I mean yea you might have PT, but when you play on a different computer/different site? [/ QUOTE ] In that example, you should use a schedule C. |
#6
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Re: This should end all of the false claims about paying US taxes on p
[ QUOTE ]
In that example, you should use a schedule C. [/ QUOTE ] But you can only use a Schedule C if you're a professional. It's possible for some online gamblers to have fairly ridiculous "Other Income" and "Gambling Loss" deductions. Take an online SNG player, who plays 30 $100 SNGs a day. He could have $100,000 in income and $80,000 in losses. Suddenly some deductions that individual (who hypothetically can't file as a professional) had are gone. The Tax Code isn't fair. But how you are supposed to treat gambling for the non-professional is very, very clear. -- Russ Fox co-author, "Why You Lose at Poker" |
#7
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Re: This should end all of the false claims about paying US taxes on p
Another article which states the letter of the law but takes no account of how things work in the real world. I again ask what if you multitable and count each table as a session and count breaks. Does that mean reporting 200 sessions a day? What if I have a full time job but play lots of onine poker and end up with $1,000,000 in wins and $999,000 in loses? What if I make some money but the site folds and I never recieve it?
P.S. Stop throwing around prison. No one goes to prison for reporting their income incorrectly. Truthfully, few go to prison even in blatant cases of fraud. The IRS just wants, and tends to get, its money. Contact a tax professional. They live in the real world. |
#8
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Re: This should end all of the false claims about paying US taxes on poker
[ QUOTE ]
Our tax code isn't exactly a shining example of common sense.... [/ QUOTE ] QFT |
#9
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Re: This should end all of the false claims about paying US taxes on p
[ QUOTE ]
[ QUOTE ] This one doesn't make sense: So say a player plays ~5/10 NL 500,000 hands in year. Is he supposed to declare that he won $4,000,000 and lost $3,500,000? That is just rediculous. How the heck would you even keep track of all this? I mean yea you might have PT, but when you play on a different computer/different site? [/ QUOTE ] This is not difficult. You bust out a little program called Excel and record the results of every session on every site. I keep track of time played, beginning balance and ending balance for the session. Very simple. [/ QUOTE ] This is not a "very simple" thing to do. Do you even play poker? I am only declaring my net because it's the only thing that makes sense. |
#10
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Re: This should end all of the false claims about paying US taxes on p
[ QUOTE ]
He could have $100,000 in income and $80,000 in losses. Suddenly some deductions that individual (who hypothetically can't file as a professional) had are gone. [/ QUOTE ] For those who are younger and will be filing taxes for the first time as well as for a few ignorant elders (I'm 35 and never even seen a tax return of mine other than to sign it), can you please discuss the implications of this - perhaps an example of the effect thereof? |
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