In a message dated 9/8/2007 11:15:12 A.M. Eastern Daylight Time,
glee4ever@... writes:
As for your main question: should poker winnings be subject to
taxes?
If you are claiming professional status, yes. It's your income and
should be taxed at the same rate I am taxed for dealing the game.
If you are not a professional, no. And as for how you tell the
difference, you got me on that one!
Any form of income or winnings is taxable regardless of your
professional or
amateur status.
And there are no graduating tax brackets for gambling win. It's a
straight 28% on the net win. So if you net $100,000 you owe $28,000,
if you net $10,000 you owe $2800. This is what makes it so hard on
full time gamblers. In any other occupation a person who makes only
$10,000 isn't gonna pay any taxes.
You can write of your losses or you can take your standard
deduction/personal exemption but you can't do both.
Filing as an amateur you can write off your losses up to the amount
of your win. You can't write off expenses.
Filing as a professional you can still write off your losses up to
amount of your win, along with expenses, but you open yourself up to
to the self-employment tax (Social Security) and you have to pay both
sides (employee/employer). It's around 15.5%. This money could
probably be invested better elsewhere. However, if your making a few
hundred thousand a year you can max out an IRA which would counter-
balance the self-employment tax.
If you have a job, busines, or any other income besides gambling it's
highly unlikely the IRS will accept your filing as a professional.
Even if you don't, if you are a first year loser, they will probably
kick you out.
File as a professional gambler and you run about a 90% chance of
being audited.
ยทยทยท
--- In vpFREE@yahoogroups.com, vp1040@... wrote: