Playing professionally and unemployment

DrMega · #1 03-14-2007, 03:58 PM

My apologies as I'm sure this has been covered, but my weak search attempts have gone unfulfilled. Also not sure if this is the right forum, but here goes...

A series of events led to me deciding to take a shot at playing for a living (we can debate the wisdom of that decision another time [img]/images/graemlins/wink.gif[/img]). While I have been making a fair amount (around $20/hour average over a couple months playing daily) it's not really enough to pay the bills and I've continued to collect unemployment.

Frankly I don't feel comfortable yet saying I'm a pro (not sure when that moment of clarity hits, but I know it hasn't for me yet) but at the same time I'm wondering if I make my way at this at what point should I stop collecting? Furthermore, say I eventually get a living wage out of this and make $100,000 this year; I have a good chance of being audited (so I'm told) and I fear reprisals from the state assuming the IRS tells them about my income these past months. Finally, even if I don't get audited, how will this pan out come tax time? I've kept good records of my wins/losses/expenses, but since I show a profit could the state say I am guilty of fraud since they could argue I'm self-employed?

I'm in Wisconsin BTW - I assume that's relevant. Thanks to any and all helpful insights.

mal_noles · #2 03-14-2007, 04:17 PM

You cant support yourself off $20 an hour in Wisconsin? I hate you and stop mooching off of everyone else and stop collecting unemployment you worthless douche.

When I was broke and played for a living I didnt mooch off the government and now that I have a high paying job it makes me sick that a cent of my tax dollars go to you.

pfapfap · #3 03-14-2007, 04:21 PM

You can't pay the bills on $20/hr of tax-free income? In Wisconsin? That's over a grand a week, and if you figure taxes not paid, it's effectively $30/hr, or a salary of over $60k/yr.

I think first thing to do is pare down those expenses a bit. Surely you don't need or even use all that stuff. Cheaper cellphone plan, less extensive cable package (or none at all, which will save braincells), cheaper and more efficient car, use a bicycle and transit more often, cook at home, etc. Maybe you could sell one of your kids, if that's an issue?

The more streamlined and efficient your budget, the easier it will be to live off of cards.

Lanzalot · #4 03-14-2007, 04:22 PM

The short answer to your last question is "Yes." What you're doing is probably fraud and against the law. While I'm not familiar specifically with WI law, I seriously doubt that your poker income isn't included in the definition of "income from any other source" or like you say "self-employment income" that UnEmp Benefits claim forms invariably ask you about.

As to playing for a living someday and being audited, you would only be in a bind if you got audited AND you also were claiming UnEmp Bennies for that same year. From what you say, that might be a ways away yet and the issue might not come up because your benefits will run out after a certain time (here in NJ, you can only collect for 37 weeks I think). That issue might not ever come up. The IRS would only report you to the State if they knew about your poker income from right now. The only way they would know that is if you told them, right? [img]/images/graemlins/wink.gif[/img]

AngusThermopyle · #5 03-14-2007, 04:22 PM

1. Talk to a lawyer or Legal Aid
2. OOT is the preferred Forum for getting legal advice from people who don't have a clue but think they are Perry Mason.

nowags · #6 03-14-2007, 04:24 PM

[ QUOTE ]
You cant support yourself off $20 an hour in Wisconsin? I hate you and stop mooching off of everyone else and stop collecting unemployment you worthless douche.

When I was broke and played for a living I didnt mooch off the government and now that I have a high paying job it makes me sick that a cent of my tax dollars go to you.

[/ QUOTE ]

QFT. There's plenty of people that make less than $20/hr at their real jobs. Don't complain too much.

Also, don't be an idiot, and pay your taxes. Uncle Sam wants his share, regardless of how you get it, and he sends you to prison if you don't play along. If you get your income from poker, file as a professional, and you can deduct your losses (not sure how to track these). If you get your primary living from something else, you can't file as a professional, and can't deduct losses.

pfapfap · #7 03-14-2007, 04:25 PM

My understanding is that unemployment is from a fund contributed to by both you and your previous employers, not something supported by the general tax payers. A shorter work history will result in less unemployment made available. Tho' I could be totally wrong on that.

*TT* · #8 03-14-2007, 04:45 PM

[ QUOTE ]
You can't pay the bills on $20/hr of tax-free income? In Wisconsin? That's over a grand a week, and if you figure taxes not paid, it's effectively $30/hr, or a salary of over $60k/yr.

[/ QUOTE ]

Please provide good advice in the future, as adults we all need to pay our taxes. 2+2 isn't a tax-cheats haven.

DrMega · #9 03-14-2007, 04:46 PM

[ QUOTE ]
[ QUOTE ]
You cant support yourself off $20 an hour in Wisconsin? I hate you and stop mooching off of everyone else and stop collecting unemployment you worthless douche.

When I was broke and played for a living I didnt mooch off the government and now that I have a high paying job it makes me sick that a cent of my tax dollars go to you.

[/ QUOTE ]

QFT. There's plenty of people that make less than $20/hr at their real jobs. Don't complain too much.

Also, don't be an idiot, and pay your taxes. Uncle Sam wants his share, regardless of how you get it, and he sends you to prison if you don't play along. If you get your income from poker, file as a professional, and you can deduct your losses (not sure how to track these). If you get your primary living from something else, you can't file as a professional, and can't deduct losses.

[/ QUOTE ]

Well, that's kind of part of my point (sorry I didn't make this clearer). I fully intend to pay taxes, so I don't consider this tax-free income by any means. I talked a little with the guy who did my taxes this year and it looks like I could expect to pay well over 1/3 of my income in taxes, meaning if I maintain this rate I could end up around $12.50 after taxes. This also doesn't account for supplying my own health insurance and what not.

I didn't mean to sound like I was whining - far from it. I feel fortunate that I've been able to make a go of it so far doing something we all love. I'm just trying to be careful not to let short-term variance (if that's what it is) get the best of me and get too confident in my own earning ability.

A final point - as pfapfap noted, unemployment is a fund that I and my employer of five years have paid into (and frankly I feel I was unfairly terminated, but that's another story). I have absolutely no ethical qualms about collecting, only legal concerns. If I were collecting welfare or food stamps or some other government-funded entitlement, I agree I should be flamed for mooching.

Thanks all for the posts thus far.

*TT* · #10 03-14-2007, 04:53 PM

[ QUOTE ]

A final point - as pfapfap noted, unemployment is a fund that I and my employer of five years have paid into (and frankly I feel I was unfairly terminated, but that's another story). I have absolutely no ethical qualms about collecting, only legal concerns. If I were collecting welfare or food stamps or some other government-funded entitlement, I agree I should be flamed for mooching.

Thanks all for the posts thus far.

[/ QUOTE ]

I suggest you don't take the advice of the users here, you should contact your accountant for guidance.