Taxes and quitting while you're even.

[Bigdaddydvo]

You all are making this entirely too complicated. Gambling income is one piece of your total gross income.

Get a sum total of wins/losses for the year. If you're in the black, it counts as taxable income. If you're a net loser, you don't need to report anything (as gambling losses are only deductable up to the amount you've won). This number is added to the income you have on your W2, interest income, etc. to calulate your total gross income. Once your total gross income is figured out, THEN handle your deductions. Gambling losses should already be figured into your winnings in the first step.

[Niediam]

You do realize that the IRS requires you to report your gambling wins even if you lose money for the year?

[pokerrookie]

Universally, your gambling winnings are figured into your gross income. That includes the sum of all sessions that you were a winner. Then, you deduct the total of all of your losing sessions, unless you exceed the max deduction allowed. In some states, you are not allowed to deduct losses. For example, I am up 18K for the 2005 year. However, I will report that I won 30K, and then deduct 12K, for my federal taxes at least. For my state (OH), I will have to go with 30K as you are not allowed to deduct gambling losses here. In this case, the OP has it exactly correct, assuming you can play well even when stuck.

[Guthrie]

No, it's the IRS that makes it entirely too complicated. We're just looking for ways to reduce the pain.

Unless you're filing as a professional gambler, deducting your losses from your winnings and then reporting that as income is illegal. You must report the total of all your winning sessions as income, and then deduct the total of all your losing sessions as itemized deductions. Depending on your individual tax situation this may or may not net out the same as deducting your losses from your winnings before reporting it. The difference can be significant, thus the desirability of reducing your losing sessions relative to your winning ones.

[Nomad84]

[ QUOTE ]
You play X hours every night

[/ QUOTE ]

I agree with what you are saying, at least from a purely mathematical standpoint, but I have a question. Won't most people who play every night (or at least regularly) have losses exceeding the standard deduction anyway? I suppose this wouldn't be the case for some microlimit players, but once you are playing at a limit where your losses exceed the standard deduction, while still not being outrageous, this tactic becomes less effective, right? I don't know enough about taxes to know how this would affect higher stakes players, but I'm pretty sure that there are tax advantages to reduced losing sessions at pretty much every level. I'm just wondering where it is most significant.

[jman220]

[ QUOTE ]
To achieve that goal, you should always try to turn a losing session into a winning session or lesser losing session. Because you are a winning/break-even player, you should be able to do that.


[/ QUOTE ]

Hah, if only one could actually do this.

[RikaKazak]

[ QUOTE ]
If you win $1.00 you declare that as income. The next day you lose $1.00 and take that as an ordinary deduction. If you are already taking the standard deduction, then that $1.00 in deductions might only be worth $.75. If you can shift winnings into a losing session, then each dollar in winnings is actually worth $1.25. So every dollar won in a losing session is worth more than a dollar won in a winning session.

[/ QUOTE ]

you're wrong on this, go read the tax code again buddy

[RikaKazak]

Mods, there is so much misinformation here can you delete this thread. I hate it when people who have no idea what they're talking about comment like they know the tax code.

[Guthrie]

[ QUOTE ]
[ QUOTE ]
If you win $1.00 you declare that as income. The next day you lose $1.00 and take that as an ordinary deduction. If you are already taking the standard deduction, then that $1.00 in deductions might only be worth $.75. If you can shift winnings into a losing session, then each dollar in winnings is actually worth $1.25. So every dollar won in a losing session is worth more than a dollar won in a winning session.

[/ QUOTE ]

you're wrong on this, go read the tax code again buddy

[/ QUOTE ]
I read it buddy. Maybe you need to go read it again.

[Guthrie]

[ QUOTE ]
Mods, there is so much misinformation here can you delete this thread. I hate it when people who have no idea what they're talking about comment like they know the tax code.

[/ QUOTE ]
If you have something to back up your accusations, you should present it. Do you dispute that gambling winnings must be declared as income, while losses are itemized deductions? Or is there something else that you don't understand?