A heads up on taxes
bumpo
Senior Member
Taxes were addressed in a different thread recently but I couldn't find it to bump. It's worth noting that there are, from what I've read, six states, mine being one of them, that have a mind boggling view of taxes on gambling.
When reporting you potentially have 2 options. One is to file as a pro and file a Schedule C. The second is to report as a recreational gambler, I guess as "other income". To file a Schedule C you must devote a substantial amount of your time to gaming and keep detailed records.
For state taxes if you file as a recreational gambler, you put your wins (defined as total amount won in winning "sessions") as income. You deduct your losses from losing sessions by itemizing in Schedule A. The catch is that the 6 states I alluded to don't allow you to deduct gambling losses. Incredible, but if audited as a rec gambler and you tell them you won 200K but lost 199K, you would be liable for taxes on $200,000 of additional income.
Anyway, if you are reporting as a recreational player, be sure to check out your state rules for reporting.
When reporting you potentially have 2 options. One is to file as a pro and file a Schedule C. The second is to report as a recreational gambler, I guess as "other income". To file a Schedule C you must devote a substantial amount of your time to gaming and keep detailed records.
For state taxes if you file as a recreational gambler, you put your wins (defined as total amount won in winning "sessions") as income. You deduct your losses from losing sessions by itemizing in Schedule A. The catch is that the 6 states I alluded to don't allow you to deduct gambling losses. Incredible, but if audited as a rec gambler and you tell them you won 200K but lost 199K, you would be liable for taxes on $200,000 of additional income.
Anyway, if you are reporting as a recreational player, be sure to check out your state rules for reporting.
Comments
Not saying you have your facts wrong because I'm really not up to speed on different states but that just doesn't sound right. I would play anything where I could win big money by gambling big money.
I have and what I did is perfectly legal. The key is you must be able to do a long form. But the advice you give is sound and picking UP sports book and race book tickets on the floor isn't going going to do it. I still watch guys do that and ask them do you really think the IRS are idiots.
My advice I've been there twice in the late eighties don't mess with the IRS Look at it this way if I'm paying them I'm making money but what bumpo is saying just doesn't make sense but then again I'm far from an expert.
Completely agree.
I think I told this story before, but the first year I really did well (by my standards anyway), I spoke to my accountant on the phone and he said in a somber tone "You know you owe a lot of taxes." I responded "Oh I know, that's a good thing, it means I had a good year." He laughed and replied "Most of my clients don't see it that way."