Using PokerTracker for Taxes...

[PShabi]

I'm going to start rereading threads I'm revisiting. I can't believe I linked to all of those! D-D-D-D-Dumbass.

Something else I've comed to realize that really scares the shit out of me. In terms of itemized deductions:

In general, if you choose not to make itemized deductions on your tax return, you get to take the "standard" deduction. From memory, I "think" this is $9500. From what I gather, if you take this "standard" deduction, then you obviously cannot itemize gambling losses.

However, if you want to itemize your gambling losses and deduct them, that would keep you from being able to take the "standard" deduction above. So, if you aren't regularly itemizing your tax return, it seems that you're going to be fucked.

I'm starting to wonder how profitable poker really is for me. Fuck life.

[Talking Poker]

Yes, that is correct. People who don't itemize their deductions will need to start itemizing. The standard deduction varies based on your marrital status, number of dependents, and so on.

Pretty much anyone who owns a house itemizes, because you get to write off your mortgage interest. Add in charitable contributions and all sorts of other stuff, and it's not hard to "Beat" the standard deduction. Hell, any poker player should be able to easily beat the standard deduction with their session losses, tourney buy ins, etc. It adds up pretty quick.

[Talking Poker]

The response I got from PT support via email a little while ago:

Sweet.

[PShabi]

I found a perfect example of how I'm getting fucked this year. Enjoy!!!



A post from elsewhere:

Let's assume a few things:

1. I am not a professional gambler.
2. I'm married.
3. I won $20000 in 2004.
4. I lost $15000 in 2004.

If I don't really have any other deductions, does this mean I get screwed big time?

Let's assume I have $1000 of deductions so I would just opt for the standard deduction. Now, because of poker, I lose that $9500 deduction, because I have to say that I lost $15000 gambling, esentially robbing me of $9500 in deductions.

Is this correct thinking? I'm just trying to get a sense of how screwed I'm getting.




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Let's just add one more assumption if no one minds:
ASSUMING NO POKER, junkmail's income was $25,000.

So, WITHOUT POKER, his AGI would be $25,000. His exemptions (assuming 1 for himself and 1 for his wife) would be $3,100 each or $6200 total. That brings him down to $18,800 taxable income. Then he takes standard deduction of $9,500 bringing his taxable income down to $9,300

WITH POKER, his AGI becomes $25,000 + $20,000 = $40,000.
He still gets the $6,200 exemption bringing his taxable to $33,800. But now he can no longer use the standard deduction of $9,500 unless he doesn't want to declare his gambling losses, so he files a Schedule A showing $15,000 as gambling losses.

This reduces his taxable income to $18,800. This means he is paying taxes on $9,500 more income ($18,800 - $9,300) even though he only netted $4,000 from his poker.

Is this correct??

Thanx so much for pointing this out and for your help!


**** What I now gather is this. The scenario where you get fucked is:

1) Non-professional
2) No itemized deductions other than poker losses.(no home ownership, etc)
3) Your net was less than $9500.

Best thing is, that's me!

It seems like this person would be the only one getting screwed and everyone else is just paying taxes? Am I right here?