#1
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SNG players and taxes unreasonable?
Hmm looking at the low relative ROI that sng players have. What should we do?
For exmaple let's take hypothetical pro A He plays $500 sng tourneys, gets around 5% ROI and plays 500 sngs per month Winnings will be: $3,150,000 Losses will be: $3,000,000 Net will be: $150,000 Looking at these numbers and reporting taxes properly, it looks like pro A will end up paying anywhere from $350-550k in additional taxes. Because of the low ROI nature of sngs, should we still just report our net winnings and losses normally? |
#2
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Re: SNG players and taxes unreasonable?
[ QUOTE ]
it looks like pro A will end up paying anywhere from $350-550k in additional taxes. [/ QUOTE ] How do you arrive at this number?... and what do you mean by "additional taxes"? |
#3
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Re: SNG players and taxes unreasonable?
[ QUOTE ]
[ QUOTE ] it looks like pro A will end up paying anywhere from $350-550k in additional taxes. [/ QUOTE ] How do you arrive at this number?... and what do you mean by "additional taxes"? [/ QUOTE ] by 'additional taxes' I think he's implying that most of his income comes from a job and he's not filing as a pro. In this case he has to pay taxes on his winning sessions and losing sessions can be itemized deductions. Don't quote me on that because my understanding of tax law and the OP is sketchy at best. |
#4
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Re: SNG players and taxes unreasonable?
A session is a day, not each SNG. You are right though that tax law regarding gambling is archaic.
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#5
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Re: SNG players and taxes unreasonable?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] it looks like pro A will end up paying anywhere from $350-550k in additional taxes. [/ QUOTE ] How do you arrive at this number?... and what do you mean by "additional taxes"? [/ QUOTE ] by 'additional taxes' I think he's implying that most of his income comes from a job and he's not filing as a pro. In this case he has to pay taxes on his winning sessions and losing sessions can be itemized deductions. Don't quote me on that because my understanding of tax law and the OP is sketchy at best. [/ QUOTE ] I guess I would argue that if he is playing 500 a month and grossing 150K for the year he is a pro and should file as such. However even if he is not a "pro" he could deduct losses from winnings unless in one of those staes that disallows deducting losses. Not sure where all those additional taxes would come from. AMT may wreak havoc but I don't know much about that. |
#6
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Re: SNG players and taxes unreasonable?
Aren't you just paying taxes on the 150k? I'm confused where the extra 350-550 comes from, even if you have another job and don't file as a pro. (Which if you file as a pro, wouldn't you have to pay more from FICA etc.?)
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#7
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Re: SNG players and taxes unreasonable?
IRS TAX FORM FOR SNG PLAYER:
1. GROSS WINNINGS______________ 2. REMIT 110% OF LINE 1_______________ |
#8
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Re: SNG players and taxes unreasonable?
If one defines a session as a single SNG, and if the player has significant income (e.g., 250k+) from his job, and if the player does not file as a pro, then the player's tax burden would be increased significantly under this hypothetical because (1) they would be pushed into a higher tax bracket, and (2) they would lose exemptions and deductions to phaseouts. Once your income gets above about 250k (married filing jointly), your marginal tax burden goes up significantly.
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#9
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Re: SNG players and taxes unreasonable?
Amazing, you really think some paper pusher at the IRS is going to great lengths to define what a session is? Everyone here seems to analyze tax situations to death. It's very simple... the amount of money that you made OVERALL at the end of the year is what your income is. I've been playing professionally for 6 years and this is exactly how I've reported and how my CPA has suggested I report my winnings. I've never had a problem, and even if I ever was audited it's very simple to show the IRS my earnings. "Here is the money in my bank account Jan 1, here are my deposits to poker sites, here are my withdrawals (aka winnings). Subtract b from c, done.
Now that'll be one box of cookies for my tax advice [img]/images/graemlins/smile.gif[/img] |
#10
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Re: SNG players and taxes unreasonable?
[ QUOTE ]
Amazing, you really think some paper pusher at the IRS is going to great lengths to define what a session is? Everyone here seems to analyze tax situations to death. It's very simple... the amount of money that you made OVERALL at the end of the year is what your income is. I've been playing professionally for 6 years and this is exactly how I've reported and how my CPA has suggested I report my winnings. [/ QUOTE ] That's exactly how a professional gambler is suppose to report their income. That is definetly NOT how a NON professional gambler is suppose to report their income I guess in this situation you'd just end up paying more in taxes then you earned in winnings. Kinda like a game you could beat, but couldnt out pace the rake. |
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