Just won six figures, need financial/tax advice

[dumbndumb]

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Congrats on the nice result!

I'm by far not a tax expert, but here are a few ideas:

First of all, Foxwoods is an Indian casino, and they might operate with slightly different procedures than non-Indian casinos. Were you given a W2-G? And if you were, what did it read? If it read any different from the actual cash-out you should probably have given the casino a Form 5754, signed by you and the choppees, showing the real distribution of the dough.

Second, with such a big win remember you can play tournaments for the rest of 2007 with 30% discount on the buy-in ... meaning if you itemize your deductions on your 2007 tax return (which probably is a good idea) you can deduct tournament buy-ins from your win when calculating the actual tax, saving at least the federal tax. Whether you can deduct on your State/City return varies.

In your situation I'd probably contact somebody like Nelson Rose, who writes the tax column for Card Player Magazine. You can find his email address on cardplayer.com. If he hasn't got the time to help you, his office can refer you to someone qualified. Believe me, you'll find it's worth it paying even a couple of thousands to a qualified gambling tax expert - and the fee might not be that high.

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Thanks for the advice, I will follow through with some of this. Foxwoods gave us zilch in terms of paper work and they will not be submitting anything to the gov because they added prize money to get around laws obligating them to report. I did get signed letters from the choppees saying essentially that I received less and they received more than the posted prize amounts (I had them write in the prize amount they actually received). This is what the tourney director recommended when I talked about concerns of being listed as first when we actually chopped 3 ways.

-Dumb

[THAY3R]

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[WarDekar]

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I was so confused until I saw the file names of these images...

Congrats on the win!

[David LoPan]

just get a good accountant, don't goto hr block and [censored], pay 500-1000 for a good consultation and you should be fine. its obv gonna push you up 1 or 2 tax brackets depending on your income level, eitherway I'd take 40% and put it in a CD until tax time, whatever you don't need its like found money.

also don't go pro just b/c u hit one score, easy road to busto

[Heavens_Myst]

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buy a kid with cancer who is good at using bolt cutters?

[MJBuddy]

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Strip baby children?

[dumbndumb]

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just get a good accountant, don't goto hr block and [censored], pay 500-1000 for a good consultation and you should be fine. its obv gonna push you up 1 or 2 tax brackets depending on your income level, eitherway I'd take 40% and put it in a CD until tax time, whatever you don't need its like found money.

also don't go pro just b/c u hit one score, easy road to busto

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You saying tax attorney is unnecessary? And when you say get an accountant, do you mean just at tax time or do so now? If I don't pay the taxes on win now, should I just hold it over in savings?

I like the idea about the CD and have considered that as one option.

Per your advice about not turning pro, I have no delusions that I am somehow a great player simply because of one score (which I still think isn't big enough to become a pro anyway). I agree with your sentiment thought. I have heard some just plain crazy ass stories about why people turn pro I recently was told by someone that he decided to turn pro after winning $800 in a tourney...seriously.

I actually have a career outside of poker, although I am a disgruntled professional. Still not enough to force me to do something silly like "going pro." I would prefer that my career pick up and stick with that.

[dumbndumb]

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I am guessing strippers and blow. Amirite?

[DVaut1]

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just get a good accountant, don't goto hr block and [censored], pay 500-1000 for a good consultation and you should be fine. its obv gonna push you up 1 or 2 tax brackets depending on your income level, eitherway I'd take 40% and put it in a CD until tax time, whatever you don't need its like found money.

also don't go pro just b/c u hit one score, easy road to busto

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You saying tax attorney is unnecessary? And when you say get an accountant, do you mean just at tax time or do so now? If I don't pay the taxes on win now, should I just hold it over in savings?

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Go see a CPA (certified public accountant) now. I don't think you need an attorney unless things get messy regarding the fact you were reported as the winner, yet chopped for much less than you took home.

The reason why you should see a CPA now and not at the end of the year is because you'll be expected to pay estimated taxes on that money. The feds/state of MA will charge you with interest/penalties if you don't make estimated payments.

I obviously wouldn't make any investments, balla purchases, etc. until you know your tax burden. Until your tax situation gets resolved, I'd just go to a local bank and put the money in a short term CD for the highest yield you can get. Make sure you don't get your money tied up because I'm guessing 30k to 35k is going to Uncle Sam and his Massachusetts equivalent by April of next year.

[tedtodd]

File as a pro- and open a SEP to deduct up to $45k this year. It also grows tax free until retirement. $45k will be a sick amount by the time u retire.