Taxes

[bj42]

After reading lots of threads I am still fuzzy on a few things and maybe someone can help.
-You have non-BJ income of 100K, BJ winnings of 20K and losses of 10K. The
20K increases your taxable income to 120K, but the losses are itemized so they don't drop you back to 110K. If you are in a 20% tax bracket, for example, you only get 20% benefit from your losses, correct?

-Some say you have to keep records by session and others say the IRS regs do not mention "session". If your records are by "trip", will that suffice in an audit?

-If you have no job, retirement/investment income that is twice your BJ net winnings for the year, work at BJ 2 days per week (including travel, play, study and research) - can you declare yourself a professional gambler even though it is not "full time" and your "livelihood" is not based on BJ?

[toastblows]

Originally Posted by bj42

After reading lots of threads I am still fuzzy on a few things and maybe someone can help.
-You have non-BJ income of 100K, BJ winnings of 20K and losses of 10K. The
20K increases your taxable income to 120K, but the losses are itemized so they don't drop you back to 110K. If you are in a 20% tax bracket, for example, you only get 20% benefit from your losses, correct?

-Some say you have to keep records by session and others say the IRS regs do not mention "session". If your records are by "trip", will that suffice in an audit?

-If you have no job, retirement/investment income that is twice your BJ net winnings for the year, work at BJ 2 days per week (including travel, play, study and research) - can you declare yourself a professional gambler even though it is not "full time" and your "livelihood" is not based on BJ?

these questions should really be answered by tax accountants and lawyers...just saying is all.

Im not going into the deductions and write offs and all that. But if you want the laymans answer to calling yourself a professional gambler without consulting formentioned people....google words like "taxes, professional, gambler" etc. You will get enough information to formulate a conclusion as to how you can claim to be a pro gambler. Personally, if my "livelyhood" was not attained from gambling, i wouldnt claim to be a pro gambler. If i had no job and no income other than playing slot machines, poker, BJ, etc...then i would look into calling myself a pro gambler.

[EasyRhino]

Originally Posted by bj42

After reading lots of threads I am still fuzzy on a few things and maybe someone can help.
-You have non-BJ income of 100K, BJ winnings of 20K and losses of 10K. The
20K increases your taxable income to 120K, but the losses are itemized so they don't drop you back to 110K. If you are in a 20% tax bracket, for example, you only get 20% benefit from your losses, correct?

You reported income, your AGI, would be roughly $120k. Then, when you're itemizing deductions, you'd toss in an extra $10k of gambling losses, along with mortgage interest, charitable contributions, etc. If your losses are more than winnings (true for most civilians), then you would only be able to deduct $20k.

So there's no real "benefit" to gambling losses, at best, they will only offset gambling winnings.

Your other two questions are good ones. No idea on the answer.

[aslan]

Originally Posted by EasyRhino

You reported income, your AGI, would be roughly $120k. Then, when you're itemizing deductions, you'd toss in an extra $10k of gambling losses, along with mortgage interest, charitable contributions, etc. If your losses are more than winnings (true for most civilians), then you would only be able to deduct $20k.

So there's no real "benefit" to gambling losses, at best, they will only offset gambling winnings.

Your other two questions are good ones. No idea on the answer.

Right. Losses are of no benefit in and of themselves, but without them, your winnings are fully taxable. Your winnings are offset against your losses dollar for dollar. Any excess winnings are fully taxable at your incremental tax rate (the appropriate tax rate for your next dollar of taxable income). Any excess losses are discarded; they are of no use for income tax filing purposes.

[shadroch]

If you have non-BJ income of $100,000 and are preparing your own taxes,you are being foolish. Its really that simple.There are tax professionals out there. Use them.

[InPlay]

Originally Posted by shadroch

If you have non-BJ income of $100,000 and are preparing your own taxes,you are being foolish. Its really that simple.There are tax professionals out there. Use them.

What if you have no deductions other then the standard one ?

2007 standard deductions

Filling status Amount Married filing jointly or qualifying widow or widower
$10,700

Head of household
$7,850

Single
$5,350

Married filing separately
$5,350


Still think you need a tax profesional ?

[aslan]

Originally Posted by shadroch

If you have non-BJ income of $100,000 and are preparing your own taxes,you are being foolish. Its really that simple.There are tax professionals out there. Use them.

I am a tax professional. Shadroch is correct. But find someone highly recommended, because there are a lot of operations that are working on a volume basis with trained but less than truly professional help who rush you in and rush you out. The yellow pages is not a recommendation. I did a lady's taxes which had previously been done by an attorney who was also a CPA. He did a rush job on her, I guess because she had so little income. He missed a number of things requiring me to refile her taxes back several years for additional refunds. I'd get a copy of Turbo Tax before I'd employ someone who does not come highly rated.

[InPlay]

Originally Posted by bj42

After reading lots of threads I am still fuzzy on a few things and maybe someone can help.
-You have non-BJ income of 100K, BJ winnings of 20K and losses of 10K. The
20K increases your taxable income to 120K, but the losses are itemized so they don't drop you back to 110K. If you are in a 20% tax bracket, for example, you only get 20% benefit from your losses, correct?

-Some say you have to keep records by session and others say the IRS regs do not mention "session". If your records are by "trip", will that suffice in an audit?

-If you have no job, retirement/investment income that is twice your BJ net winnings for the year, work at BJ 2 days per week (including travel, play, study and research) - can you declare yourself a professional gambler even though it is not "full time" and your "livelihood" is not based on BJ?

Do you have any W2 issued to you for any amount of money that you won? If so claim the amount that was W2 to you and nothing else !

[InPlay]

Originally Posted by aslan

I am a tax professional. Shadroch is correct. But find someone highly recommended, because there are a lot of operations that are working on a volume basis with trained but less than truly professional help who rush you in and rush you out. The yellow pages is not a recommendation. I did a lady's taxes which had previously been done by an attorney who was also a CPA. He did a rush job on her, I guess because she had so little income. He missed a number of things requiring me to refile her taxes back several years for additional refunds. I'd get a copy of Turbo Tax before I'd employ someone who does not come highly rated.

Since you are a tax professional how do you handle state taxes. When you earn your money in one state and live in another? You ought to know this I am talking about a professional gambler. All the people profess to pay taxes but nobody knows the answer to this question as a professional you should spit this one out pretty easy!

[aslan]

Originally Posted by InPlay

Since you are a tax professional how do you handle state taxes. When you earn your money in one state and live in another? You ought to know this I am talking about a professional gambler. All the people profess to pay taxes but nobody knows the answer to this question as a professional you should spit this one out pretty easy!

You pay state taxes in the state in which you reside, not the state in which you earn your income. In any state returns that I have done, the state return uses the income declared on the Federal return as a starting point for state income taxes. So, in answer to your question, the income filters down from your Federal Income Tax return as adjusted gross income.

Many people in the Washington, DC area work in Maryland or DC, but live in Virginia. They pay Virginia income tax only. I know. I've done so all my life. If you move mid-year from one state to another, you will have to file a part-time residence filing in both states, dividing your income between what you earned while living in one state with what you earned while living in the other state. It's a royal pain in the ass.