Tax Advisor

JDMcNugent7 · #1 11-21-06, 07:05 PM

Drove an hour with my dad to my brilliant tax advisor today, for the first time.

I sat down and talked to him and told him that I've made about 120k in poker so far this year. When he then said "But much did you lose?" I knew it was going to be a painful explanation. After telling him that the 120k was my net amount he seemed like he didn't beleive me and asked how I made so much at this age. I told him that it was all of it was from internet poker and just studying it and playing alot of hands, to which he said "wow, you on a hot streak?" I told him no, that it's actually pretty consistant money if you look at it over the long run. Apparently he still didn't understand and felt the need to tell me this longass Blackjack story about how he won 55 bets and then lost it all in the very same night, telling me that the same thing could happen to me at anytime. I told him I don't play blackjack because there's no edge in the game, to which he replied "well it's still crazy, it's like being hit by lightning winning that much money from poker at your age" - I'm not really sure wtf that means and I had to fake cough to keep myself from laughing.

Finally he stopped giving me awesome poker advice and I got to find out the annoying crap like why I can't qualify myself as a business and that really it's not that big of a plus to be qualified as a business anyway. Also that I was supposed to keep very detailed records of total money won, and then total money lost and subtract the two on the tax form. He said in some states you actually only get taxed on the total money won. So if you won $300,000 but lost $180,000 you would still be taxed on the $300,000. I'm thinking that would be pretty brutal so maybe there's a way around it. That's not the case in Missouri anyway, so whatever. I also found out some stuff about tax-differed annuities that you put your money in but can't touch until your 60, which I might put a decent sum of money into. The worst part was finding out I'm going to have to pay 29k on my so far 120k in winnings this year.

When we left he told me it's great I've kept such a level head through all this but that it's probably best if I just stop while I'm ahead.

Boobie Lover · #2 11-21-06, 07:33 PM

Just be glad that you didn't meet someone that actually plays online poker. I always regret the instance that I have to hear about how awesome that person is at $5 SNGs.

And yeah, taxes are going to suck this year.

Talking Poker · #3 11-21-06, 07:58 PM

Ironically, I met with my accountant / tax advisor today too. She's a lot less annoying than your guy. I would seriously be tempted to walk out of the office of someone who isn't bring enough to understand that poker and blackjack are not even close to the same thing, and that you can't compare them to each other. I really have trouble talking to people who think of poker the same way they think of BJ, craps, roulette, etc. I mean, if you can't understand that there is SOME element of skill in a game where you are playing against other players and not against the house, do I really want you giving me tax advice???

You should have know all about the records thing (keeping track of all your sessions, claiming all the winning ones and the sybtracting the losing ones, etc)... That's been mentioned many times in here before. But fortunately, Poker Tracker should help you out with that, at least to some extent. For ytour non-PT play, I hope you have SOME records you can fall back on, especially since this is going to be your primary source of income this year.

The majority of my conversation with my accountant today (I was there for almost 2 hours) had to deal with if I should set up a corporation for my poker play or not. There are pros and cons, but in the end, I'm not sure it would be worth it for me. She is looking into seeing just how much I need to play to be classified as a professional gambler, which would allow me to use Schedule C (I think) for all my poker stuff, which would have saved me about $1500 in taxes had I been able to LAST year, for example. This is because as your Adjusted TOTAL income (the number that includes all your winning sessions but not any of your losing session) increases, a lot of deductions you would normally be allowed to take start to get phased out. This hurt me more than I expected last year... Anyway, she wasn't sure and is going to check into it, but she said she thought if you spent 1000 hours per year playing, that would be enough to classify yourself as a professional, and I'm pretty sure I can justify that. That's only 20 hours per week...

Taxes suck.

Edit: Um... JD:

Talking Poker · #4 11-21-06, 08:04 PM

Two old threads people may want to read:

This one is a must read, IMO:

This one is good too:

eejit101 · #5 11-21-06, 10:22 PM

Thats 24% tax give or take. (thats 2% more than Footballers (Soccer) earning £100,000 a week pay here)

Serioius Question - Though you live in the USA, is there no way to claim the winnings as won in another country, i.e the UK, Gibraltar or Isle Of Man. Surely there must be some way of dodging paying $29,000 to the government for gambling and winning (as they see it). Couldnt you transfer some to someone, call it a stake or a gift or whatever. Then they send it back in the form of a cheque from their personal bank to yours?

Those ideas are probably the worst ones ever, but there must be some accountants over there who will "help you out" for a tiny fee compared to that?

Disclaimer - Is anyone official reads this, its not advice, its a general musing

sjay2k · #6 11-21-06, 10:28 PM

Hi eeej, welcome back

PShabi · #7 11-21-06, 11:06 PM

Do me a favor. Never, EVER, start a career in crime, okay?

The only thing you are right about is the last sentence.

1) You are a US citizen, any money, earned anywhere is taxable.

2) I believe you can give up to $10,000 and write it off, but not more than that. That was my college graduation gift from my grandpappy and he told me that.

Then you think the check (not fucking "cheque") isn't going to leave a record in your bank account as being deposited? You do know that your account would be the first place they look, right?

3) You're pathetic to come back here after a banning, especially after not even offering an explanation to your balatant lies to try and gain acceptance. Pathetic idiot.

jimmym · #8 11-21-06, 11:32 PM

The best advice he gave was for you to pay your Tax, 29k on 120 is the price of success.

The second best advice he gave was to quit, No hang On, surely its his job to give Tax advice. Anyway what the fuck does he know about poker, pay the tax and then win some more.

The Best advice Shabi gave was for eejit so I guess that will fall on deaf ears.(sorry Shabi just read this back, and it reads like am saying you give shit advice, well I hope you know I dont mean that}

Talking Poker · #9 11-21-06, 11:43 PM

Ditto. All of that...

Of course, I must say that I am not AT ALL surprised to see eejit's first post back being terrible advice about something along the lines of:
- Scamming people.
- Making a quick buck.
- Evading taxes.
- Taking the easy way out.
- Being a general degenerate.

I really don't like people like that. What ever happened to success through hard work, taking responsibility for your actions, and other honorable things like that.

Pathetic. I'm tempted to reban him for another week just for this post, instead of the "explanation" he owes us all, not to mention the HUGE apology he owes Robbie Robb.

Quint · #10 11-22-06, 12:13 AM

You shouldn't be angry at your tax bracket or do anything to cheat on your taxes. It's just not worth it. Once you buy a house, get married and have a couple of little tax deductions you may even feel a bit ashamed at how little taxes you pay. Look forward to the day when you pay $120k a year in taxes.

eejit101 · #11 11-22-06, 12:16 AM

firstly, i forgot about that after speaking to Rob on MSN, but tis done

Not causing a fight or anything but....

Living here its just extremely different to where you live.

I win $65k, i pay nothing. If JD wins $65k, he pays $15,500??? Bear in mind we all live on the same earth thats alot to just "give away". Yes he is helping the country by paying taxes, as do i when i work in real life, but thats just wrong.

What im saying is by all means tax the professional gamblers, people who dont go out at all and do any manual labour, but to tax a guy of 18/19 who is in college studying, and plays poker for fun is beyond me. I said "fun" because of JDs previous post in one of his threads about not wanting to play poker for a living, it was helping him get through college.

Just my

from a different perspective, im not telling him to not pay it or whatever

GTDawg · #12 11-22-06, 12:39 AM

Although I agree with everything else you said...you do realize they came up with the language, right?

Kurn · #13 11-22-06, 12:45 AM

This is far worse than just "forgetting" to claim the income. Worse than straight out tax evasiom. It might even be construed as money laundering, or worse yet, structuring. A sure path to prison.

JDMcNugent7 · #14 11-22-06, 12:56 AM

TP, my tax guy said you only need to play 10 hours a week to consider yourself a business.
Also I lost a PT database when my computer broke but my tax guy is saying that for the first year of doing this there should be no real problems if the wins/losses thing isn't totally accurate in Missouri as long as the Net income is right on - which I know for sure.

PShabi · #15 11-22-06, 12:58 AM

They created it, we perfected it. No biggie.

PShabi · #16 11-22-06, 12:58 AM

OMG JD, seriously, get a new tax guy and forget everything this idiot said to you today.

Talking Poker · #17 11-22-06, 01:33 AM

Yeah, I've seen like 3 or 4 red flags (at least) from this guy already. Do yourself a favor and at the very least do some research on your own (those threads I liked to are a nice start), and then go talk to someone else. This guy could end up getting you in pretty big trouble.

And eejit, I know I shouldn't even dignify you with a response, but "paying taxes" <> "giving money away." Stop being a fucking tool and suggesting people commit felonies. FFS, man...

Kurn · #18 11-22-06, 01:45 PM

JD, you need to find a tax attorney and/or CPA with experience dealing with gambling issues.

While the IRS usually requires 2 prior profitable years (to demonstrate an expectation of success) to justify filing your gambling income as self-employment income, people have fought that and won. The simple fact that poker is your primary source of income is a strong mitigating factor, but you need an advocate who won't let the IRS run over him.

This statement troubles me about your guy:there should be no real problems if the wins/losses thing isn't totally accurate in Missouri

The federal tax code does not change based on what state you live in. Any statement he makes regarding Missouri is only relevant to MO state income taxes. Federally, you still must list all winning sessions as *other income* on form 1040, and all losing sessions as an itemized deduction on schedule A. IRS pu. 529 expressly forbids claiming the net. This isn't as bad as it sounds. As long as your records indicate an honest and consistant attempt to be accurate, the Feds won't be too rough on you. Remember, their job isn't to put people in jail, their job is to collect money. They only get tough when they think you're trying to deceive them.

The guy you talked to sounds out of his element. Find somebody who kinows this stuff.

Boobie Lover · #19 12-04-06, 04:55 PM

I talked to some tax lady today, and she said I would owe 45% (yeah, that's not a fucking typo). Some 15% self employment tax added on. That can't be right can it?