Front Page of the Jacksonville Paper Yesterday

[Talking Poker]

Contrived, yes, but a perfectly legitimate example. This is exactly how people can get "screwed." My problem with this logic is how you (and everyone else) are looking at the "standard deduction." I'm convinced 90% of the public has no idea what this is for, or why the get it, and so on. The whole purpose of the standard decuction is to prevent Joe Blow (no relation to Joe) from having to itemize every little thing all year long. If you have MORE than $6000 in deductions, as Joe does, you itemize them. If you don't, you just take the standard deduction and be done with it.

Let's say for example you pay $6050 in morgage interest in a year, you give nothing to charity, you don't play poker, etc. That is your ONLY deduction. Well, you get to write off that entire $6050. It FEELS like you are only writing off an extra $50, and in reality you are, but you are still getting to claim the entire $6050. Looking at it as though you would have gotten to write off $6000 anyway, so you should be renting instead of owning (or drawing other unrelated conclusions) is just silly.

Also, back to Joe's example for a minute. As you said, he lives in Mass and they have stupid tax laws. Well, that's fine, but you can't use that in this example. Joe has the CHOICE to live in another state, like Florida, where there is no income tax. So you can't blame that on the IRS.

But back to the point - yes, you can make a case and manipulate the numbers like above, but for the most part, it's not THAT bad. My off the record advice to Joe and his $3000 in poker winnings: Don't even report it. Illegal, yes. But realistically, unless he's an idiot about it, there is no reason the IRS should ever know he even PLAYED poker last year.

[Kurn]

See my straw man above. In short, for that to happen, you'd have to have a marginally profitable year but have played a great deal, not normally itemize deductions on Federal, *and* live in a State that has a State income tax.