Tax related questions....

[duck_butter]

I hope to make money in 2006 playing poker (will be my first), but I have a few questions I'm unclear on after having read the last 10 pages of posts in this forum.

1. I keep hearing comments about quarterly forms and estimated income. Will someone please clarify on this subject? Is this only for full time / pro players? Or is this also for those who play on the side for extra money and have a full time normal job?

2. From the posts I've read, it seems the IRS wants you to claim your Gross winnings and deduct your Gross losses, instead of just claiming your Net winnings at the end of the year (which makes the most sense IMO). So what is the difference here? Is there a limit to the amount you can claim as Gross losses? Is the IRS taxing you more than the amount you actually make with this?

3. I heard there are 9 states that don't allow you to deduct gross losses. ??? So does this mean if you win 100K over the year but lose 90K (for a net win of 10K), these states expect you to pay taxes on 100K of income? Surely this is absurd and I am misinterpreting it. Anyone know the 9 states?

Thanks a bunch for the help!

DB

[Python49]

1. Nope, everyone.
2. Difference is that it affects other deductions.
3. Yes its absurd.

[Niediam]

1. The idea behind this is that you are getting a free loan from the government if you wait until the end of the year to pay your taxes. Professionals definately have to pay quarterly but I'm not sure if non-pros are supposed to or not. I also belive that you are not required to pay quarterly your first year as the amount you pay is based on the previous years income.

2. Professionals can net but non-pros have to declare total winning sessions and deduct losing sessions. The main way this hurts the amateur is that they can no longer take the standard deduction but it may affect many other things such as student loans, mortgage deductions, and alternate minimum tax.

3. This is correct and yes it is absurd. I don't know which states they are but several of them are in the mid-west.

[CallYNotRaise06]

i hope its not illinois...

[Blowup Doll]

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i hope its not illinois...

[/ QUOTE ]

I believe illinois is one of them.