Team: Incorporate or Not?
- Thread starter Dyepaintball12
- Start date
muppet said:
anyone point me in the right direction on this? 
With Southwest Airlines Rapid Rewards, the more you fly, the more you earn. After taking just 8 roundtrips (or after earning 16 credits) in 24 consecutive months, you'll automatically get a standard flight free, anywhere Southwest Airlines flies! You can earn even faster when you choose a (Dead link: http://www.southwest.com/cgi-bin/updateTravelerAccount?action=retrievebusinessselectcredit&requestFrom=RR) _Business Select fare_ with priority seating, security lane access, a premium beverage coupon, and double (2.0) credits on flights greater than 750 miles, or 1.25 credits on flights less than 750 miles.
You can also earn Awards fast through our Credit Card, Rental Car, Hotel, Dining, and Retail Preferred Partners. Simply check out our Preferred Partner page to find out the latest news and learn more about the earning details of each Partner.
More--http://www.southwest.com/rapid_rewards/about_rr.html
Off-topic: Freq flyer points / CC
Aslan's post prompted me to remind folks here that Schwab has an amazing CC point deal. Instead of miles, or 1% back in gift cards, they give you a full 2% of all purchases, in cash.
It's deposited into one of their brokerage accounts, which obviously they want you to use for investing, but you can just cash it out if you prefer.
I've found this of far greater value than collecting frequent flier points or any other credit card offer. Tough to beat 2% free and clear, across the board.
Aslan's post prompted me to remind folks here that Schwab has an amazing CC point deal. Instead of miles, or 1% back in gift cards, they give you a full 2% of all purchases, in cash.
It's deposited into one of their brokerage accounts, which obviously they want you to use for investing, but you can just cash it out if you prefer.
I've found this of far greater value than collecting frequent flier points or any other credit card offer. Tough to beat 2% free and clear, across the board.
aslan said:
I have a Southwest Airlines credit card. I charge everything I purchase on it to obtain points toward a ticket. Plus there are other ways to accumulate points, such as using certain vendors (Car rentals, hotels, etc.) Also, 8 round trips gives a free ticket.
With Southwest Airlines Rapid Rewards, the more you fly, the more you earn. After taking just 8 roundtrips (or after earning 16 credits) in 24 consecutive months, you'll automatically get a standard flight free, anywhere Southwest Airlines flies! You can earn even faster when you choose a (Dead link: http://www.southwest.com/cgi-bin/updateTravelerAccount?action=retrievebusinessselectcredit&requestFrom=RR) _Business Select fare_ with priority seating, security lane access, a premium beverage coupon, and double (2.0) credits on flights greater than 750 miles, or 1.25 credits on flights less than 750 miles.
You can also earn Awards fast through our Credit Card, Rental Car, Hotel, Dining, and Retail Preferred Partners. Simply check out our Preferred Partner page to find out the latest news and learn more about the earning details of each Partner.
More--http://www.southwest.com/rapid_rewards/about_rr.html
1200 reward dollars = 1 rapid rewards credit.
16 rapid rewards credits = 1 roundtrip flight.
so, in order to get a 'standard award' free flight you need 19,200 reward dollars.
19200x = y, where y is the value of the roundtrip flight and x is the ev of each dollar spent on the card.
for me, i pretty much only fly to vegas and wouldn't get much value out of it. it looks like it's selling for $300 or so on craigslist.
if y = 300, then x = $.016. which is 1.6% on normal purchases. for sw flights and some other things it is double (3.2%) or more.
however you have to take into account the annual fee of $59, and the hassle (for me) to sell the free ticket. if you use it yourself, you do have to pay the sept 11 fee of $5 to $10 (depending on if you have direct or connecting flights)
so all-in-all i'm not sure this is that great of a deal. it is nice though that they give you a free flight when you sign up. i will most likely cancel before they hit me with the next annual fee in june 2011
I don't pay a fee. I believe if you use your card X dollars they don't charge an annual fee. Also, SW does not charge me any extra fees--you called something a 911 fee?; however, the airport has a fee which you will have to pay no matter who you fly with--is that what you mean? (I think they call it a P and E charge?) Also, you have to factor in that you not only get points for what you charge, but you get additional points just for using certain vendors for car rentals and the like. I got three free round trip tickets this year. I usually get two per year. For me I haven't found anything better. Since I mainly fly to Vegas, this is a good deal from Washington, DC. I don't try to sell my tickets, so therein lies a difference. If you don't want to use the tickets yourself, I suppose other cards could be better.
Just one more reason why incorporation is a ridiculous idea. You catch a player palming a couple of greens, and you can't just cuss him out and throw him off the team, you may have to get the law involved. And once that happens he can subpoena everyone on the team and their names are all in the public record as AP's. Well, as ex-AP's, because they are now all burned. :flame:
Aslan,
Could he not just form a simple DBA as a professional gambler (simply by registering the name in his local county), and thereby still get to itemize and deduct all of his expenses?
The advantage of doing so would be that a Pro could then still fill out a regular individual tax return based of his SS # and enjoy the benefits of the deductions and a relatively simple return.
Wise words about giving up some deductions to fly under the IRS radar. Ask me how I know.
Legitimate business expenses that are slighly out of proportion to "their norm" are a huge red flag to the IRS. For whatever reason, mileage seems to be a favorite target of theirs as well. You may be completely right and held harmless, but you've got to take the ride. All that wasted time. The IRS needs to be abolished. Our system unfairly picks on small businessmen.
OP: as others have stated one of the primary reasons of incorporating is to avoid liability. The trade off is your life becomes a paperwork nightmare at tax time. I used to file as a DBA off my SS # and life was reasonable at tax time. Then my genius attorney recommended I form two LLCs for my company to protect me from liability.
But he forgot to mention that there has to be a double accounting QuickBooks record showing the movement of every single penny in the corporations: account to account, accounts to payees, accounts to credit card companies for expenses, etc. Then there are the two additional tax returns for each LLC (besides my personal return) and then there's the State Franchise Tax. To say this is an accounting nightmare is the understatement of my lifetime: it's now a part-time job just keeping up with my taxes.
FD
Could he not just form a simple DBA as a professional gambler (simply by registering the name in his local county), and thereby still get to itemize and deduct all of his expenses?
The advantage of doing so would be that a Pro could then still fill out a regular individual tax return based of his SS # and enjoy the benefits of the deductions and a relatively simple return.
Wise words about giving up some deductions to fly under the IRS radar. Ask me how I know.
Legitimate business expenses that are slighly out of proportion to "their norm" are a huge red flag to the IRS. For whatever reason, mileage seems to be a favorite target of theirs as well. You may be completely right and held harmless, but you've got to take the ride. All that wasted time. The IRS needs to be abolished. Our system unfairly picks on small businessmen.
OP: as others have stated one of the primary reasons of incorporating is to avoid liability. The trade off is your life becomes a paperwork nightmare at tax time. I used to file as a DBA off my SS # and life was reasonable at tax time. Then my genius attorney recommended I form two LLCs for my company to protect me from liability.
But he forgot to mention that there has to be a double accounting QuickBooks record showing the movement of every single penny in the corporations: account to account, accounts to payees, accounts to credit card companies for expenses, etc. Then there are the two additional tax returns for each LLC (besides my personal return) and then there's the State Franchise Tax. To say this is an accounting nightmare is the understatement of my lifetime: it's now a part-time job just keeping up with my taxes.
FD
Do you mean filing a Schedule C as a self employed person? Don't forget that you must also pay social security and medicare taxes of more than 15% on your earnings. What benefits are you hoping to enjoy by declaring your gambling as a business? Seems to me you are putting yourself in a spotlight for the IRS to scrutinize, whereas most gamblers are only exposed to the extent that they have exceeded some IRS guideline such as winning $1,200 on a slot or cashing in $10,000 from a table game. Most likely your rooms and meals will be comped, so this entire exercise will be over transportation to your favorite casino. Do you really think it's worth all the aggravation? Also, now that you're a business, are you going to declare your comps as winnings, too? To the extent that they are exchanged for meals and rooms, aren't they also reportable as income for tax purposes? Actually I don't know the IRS's position on this, but I wouldn't be surprised that as a business you would have to report these "earnings." All in all, I don't think declaring yourself a gambling enterprise is an advantage play. But I may be wrong.
Aslan, for many of us this is not a minor expense. There can be other expenses like library, software, computer equipment, meals on the road that aren't comped, and tips, but typically these will be relatively minor.
For a Schedule C filer, since rooms and meals if paid for in cash would be business expenses, such comped items will be a wash. I have not heard that the IRS has ever asserted that comped rooms or meals are reportable as income, either by Schedule C filers or by others. (And I've been paying close attention to everything other players report on this subject on public boards and elsewhere.) For one thing, there would be a obvious, difficult valuation problem. Actually, were the casino instead to give you cash that you used to pay for meals, it wouldn't be 100% a wash, even for a Schedule C filer, because meals are a special category of business expense that isn't 100% deductible. Fortunately, the tax boys have never made an issue of meals written off by the casino as a straight comp.
I assure you that the tax laws treat comps in the form of CASH BACK, and other comped goods or prizes of substantial value, as taxable income. This is true whether or not you file Schedule C.
For a Schedule C filer, since rooms and meals if paid for in cash would be business expenses, such comped items will be a wash. I have not heard that the IRS has ever asserted that comped rooms or meals are reportable as income, either by Schedule C filers or by others. (And I've been paying close attention to everything other players report on this subject on public boards and elsewhere.) For one thing, there would be a obvious, difficult valuation problem. Actually, were the casino instead to give you cash that you used to pay for meals, it wouldn't be 100% a wash, even for a Schedule C filer, because meals are a special category of business expense that isn't 100% deductible. Fortunately, the tax boys have never made an issue of meals written off by the casino as a straight comp.
I assure you that the tax laws treat comps in the form of CASH BACK, and other comped goods or prizes of substantial value, as taxable income. This is true whether or not you file Schedule C.
Indeed WRX, that's the other side of this equation. We should take any legitimate deduction, we actually shouldn't live in fear of the IRS--we should stand up for our rights. (It's just once you've undergone a couple of IRS audits, it can make you a little gun shy--and therefore under-report some legitimate deductions. Because unfortunately, even if you prevail, they don't compensate you for all your lost preparation time--which is the killer.)
And again, IMHO, elect politicians who seek to abolish the IRS.
Regards,
FD
And again, IMHO, elect politicians who seek to abolish the IRS.
Regards,
FD