Full Time Pro with Part Time Job?
- Thread starter EasyRhino
- Start date
ihate17
Well-Known Member
Yes
ihate17
Perhaps I should have stated things differently. Because of past tax difficulties I now do claim table game winnings (less losses), while most people only claim machine W-2G's. I keep a very detailed journal and for another subject, you would be amazed how different my numbers are from those of win/loss statements. That said, I have been told that I can not deduct things like travel expenses which I think is where you are going because I have another full time business plus several rental properties. Of course a trip to a place like Vegas can easily be made at the same time there is a convention in town that relates to my business and then the expenses deducted. I still get enough comps from some places that the expenses are not significant anyway.EasyRhino said:
ihate17
EasyRhino
Well-Known Member
Are you reporting the gambling income on your regular 1040, or are you reporting it on Schedule C (business profit/loss)? And has it survived an audit?
I'm asking because the difference between counting wins/losses per session vs. netting would make a pretty dramatic difference in my own personal tax situation.
I'm asking because the difference between counting wins/losses per session vs. netting would make a pretty dramatic difference in my own personal tax situation.
This is why I recomend everyone use a tax pro.:whip: Did you know that expenses related to a job search may be tax deductable?
So if you interview or apply for a job,the cost of the trip to the interview may be considered as a tax deductable expense? Anyone care to think about the possibilties such a rule might offer?
So if you interview or apply for a job,the cost of the trip to the interview may be considered as a tax deductable expense? Anyone care to think about the possibilties such a rule might offer?
ihate17
Well-Known Member
other income
I think I am finally off the IRS hit list but for a long time every several years I was audited. It really is more about my real business but where the IRS has found a couple of mistakes on my part, the total take for their audits has been a waste of their time.
The funniest but most serious audit I ever had was back in the early 80's.
During the year questioned my wife returned to her country of origin to sell some property she owned there and help her brother remove some of his assets from that country before he immigrated to the U.S. Because she would return sometimes we had kept a bank account open in a U.S. based credit union that had offices on U.S. military bases in that country to make banking easier for her when she visited.
She sells the house and then illegally converts that nations money to U.S. currency (against their laws but not ours) and makes some very big cash deposits in the credit union.
Then she takes the equivilant of well over a million dollars in that nations currency and does the same thing for her brother. The law in that nation at the time would have only allowed him to leave with several thousand dollars but people there used family and friends already in the U.S. to do this and we later found out that IRS was well aware of this.
So in a year where my then employer went out of business and later was tried and convicted of using that business and another for laundering money for the mob, we deposited a ton of cash while reporting very little income. I think we rang every alarm bell IRS had.
I am audited not by a regular auditor but by the fraud divison. That means the auditor wears a weapon and reads you your rights. I am not a complete idiot and was sure I knew what the audit was about but only later did I learn about my old company and that they may have put 2 and 2 together and got 5.
I brought as much documentation as possible to the audit and was given a list of further documentation the IRS would need to prevent them from considering these funds as income. What I did not know was that while I was at their office an IRS agent who spoke my wife's native language was on the phone with her and getting her story. It's nice to be telling the truth because our stories matched and the IRS is very well versed in this situation because it is very common with immigrants from her country. The next day I received a phone call from my auditor who informed me that the investigation was being dropped-for now but I would be receiving a supplimental tax bill on my brother in laws money because non resident interest is taxed at a higher rate than our then tax rate.
After that my business which also can turn a lot of cash, took off and every couple of years I was back at their office locally. At this point in my life I think I have no future financial worries and would rather pay the tax man a few extra dollars that I might have hidden rather than keep being audited. The last two audits have showed nothing for them to grab and hopefully they will leave me alone.
Sidenote: After several years of doing my taxes, my accountant started thinking about advantage play. I gave him a couple of good books and we got together a few times but when we finally went to a casino he just could not keep the count. I would watch him and the count and quietly ask him what number he had and he was never really even close. Told him to buy a computer program and practice practice and practice. He decided to forget it.
ihate17
It is listed as other income and it has survived 4 audits over the past bunch of years which is another subject altogether. So I am not deducting expenses, though many of the real expenses do show up on my schedule C.EasyRhino said:
I think I am finally off the IRS hit list but for a long time every several years I was audited. It really is more about my real business but where the IRS has found a couple of mistakes on my part, the total take for their audits has been a waste of their time.
The funniest but most serious audit I ever had was back in the early 80's.
During the year questioned my wife returned to her country of origin to sell some property she owned there and help her brother remove some of his assets from that country before he immigrated to the U.S. Because she would return sometimes we had kept a bank account open in a U.S. based credit union that had offices on U.S. military bases in that country to make banking easier for her when she visited.
She sells the house and then illegally converts that nations money to U.S. currency (against their laws but not ours) and makes some very big cash deposits in the credit union.
Then she takes the equivilant of well over a million dollars in that nations currency and does the same thing for her brother. The law in that nation at the time would have only allowed him to leave with several thousand dollars but people there used family and friends already in the U.S. to do this and we later found out that IRS was well aware of this.
So in a year where my then employer went out of business and later was tried and convicted of using that business and another for laundering money for the mob, we deposited a ton of cash while reporting very little income. I think we rang every alarm bell IRS had.
I am audited not by a regular auditor but by the fraud divison. That means the auditor wears a weapon and reads you your rights. I am not a complete idiot and was sure I knew what the audit was about but only later did I learn about my old company and that they may have put 2 and 2 together and got 5.
I brought as much documentation as possible to the audit and was given a list of further documentation the IRS would need to prevent them from considering these funds as income. What I did not know was that while I was at their office an IRS agent who spoke my wife's native language was on the phone with her and getting her story. It's nice to be telling the truth because our stories matched and the IRS is very well versed in this situation because it is very common with immigrants from her country. The next day I received a phone call from my auditor who informed me that the investigation was being dropped-for now but I would be receiving a supplimental tax bill on my brother in laws money because non resident interest is taxed at a higher rate than our then tax rate.
After that my business which also can turn a lot of cash, took off and every couple of years I was back at their office locally. At this point in my life I think I have no future financial worries and would rather pay the tax man a few extra dollars that I might have hidden rather than keep being audited. The last two audits have showed nothing for them to grab and hopefully they will leave me alone.
Sidenote: After several years of doing my taxes, my accountant started thinking about advantage play. I gave him a couple of good books and we got together a few times but when we finally went to a casino he just could not keep the count. I would watch him and the count and quietly ask him what number he had and he was never really even close. Told him to buy a computer program and practice practice and practice. He decided to forget it.
ihate17
EasyRhino
Well-Known Member
Okay, just to make sure I'm clear on this, are you reporting the gambling income on your 1040, under "Other Income"? (i.e you're not using Schedule C, Profit/Loss from business)
And this is a NET winnings figure? (i.e. you're not also deducting losses on Schedule A, under line 28a Misc Deductions, Gambling losses not more than winnings?)
I'm just asking because that's not what google would have led me to believe.
And this is a NET winnings figure? (i.e. you're not also deducting losses on Schedule A, under line 28a Misc Deductions, Gambling losses not more than winnings?)
I'm just asking because that's not what google would have led me to believe.
Wow, and I thought my taxes were complicated when I did an IRA conversion.ihate17 said:
moo321
Well-Known Member
I don't know enough about the law in your state or tax law in general, but maybe this will point you in the right direction. You may be able to incorporate as a DBA (sole proprietorship) in your state and write off expenses (a DBA just says that you are Doing Business As, and technically isn't even an incorporation). Extremely simple to do, probably just one form. You may need a vendor's license, but I doubt it because you aren't selling anything.
You also may be able to incorporate as an LLC, or an S corporation with a close board, meaning you must have 3 officers, and you can be all 3 officers. An LLC is taxed the same way as a sole proprietorship, meaning all earnings are reported as income on your personal statement in the year they are earned. An S corporation is similar, but is considered a corporation for legal purposes (meaning you can sue, enter into contracts as a corporation, but may not be able to represent yourself in court, etc.). I believe that retained earnings in an S corp are not taxed until they are drawn from the corporation.
Both an LLC and S corp offer limited liability, which doesn't really mean anything to you, because you have no creditors as a gambler, and no possibility to be negligent or be sued or anything. I believe an LLC is usually around $300 to start, and an S corp is around $700. Go do some research, and then talk to an accountant, because they will have ideas you and I both have never dreamed of. You would be amazed at the legal abuses of the tax code you can get away with by having a good accountant.
You also may be able to incorporate as an LLC, or an S corporation with a close board, meaning you must have 3 officers, and you can be all 3 officers. An LLC is taxed the same way as a sole proprietorship, meaning all earnings are reported as income on your personal statement in the year they are earned. An S corporation is similar, but is considered a corporation for legal purposes (meaning you can sue, enter into contracts as a corporation, but may not be able to represent yourself in court, etc.). I believe that retained earnings in an S corp are not taxed until they are drawn from the corporation.
Both an LLC and S corp offer limited liability, which doesn't really mean anything to you, because you have no creditors as a gambler, and no possibility to be negligent or be sued or anything. I believe an LLC is usually around $300 to start, and an S corp is around $700. Go do some research, and then talk to an accountant, because they will have ideas you and I both have never dreamed of. You would be amazed at the legal abuses of the tax code you can get away with by having a good accountant.
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I was confused by exactly the same thing - it sounds to me like he is just reporting gambling winnings like he's supposed to - nothing at all about being a pro.EasyRhino said:
As far as reporting net winnings on that line, I just don't get it either. But I'm certainly no expert lol.
aslan
Well-Known Member
I came across this source of information on gambling and taxes. It may help clear up some if not all these questions. :dog:
The Taxman Cometh
By Yolanda Smulik Roche. E.A and Roger C. Roche, E.A.
http://www.casinogaming.com/features/taxlaws.html (Archive copy)
The Taxman Cometh
By Yolanda Smulik Roche. E.A and Roger C. Roche, E.A.
http://www.casinogaming.com/features/taxlaws.html (Archive copy)
ihate17
Well-Known Member
Confusing myself and others
Sorry for the confusion here.
Losses are deducted, I screwed the whole thing up by saying pro and that is not what it is. Simply most people only declare things they get W2-G's on, I have learned that I should also declare table game wins as well as the losses.EasyRhino said:
Sorry for the confusion here.