Quote:
Originally Posted by callipygian
You're like 3 exchanges behind.
The question isn't "Are you ****ed?" but "How ****ed are you?"
If you live in a state where you can deduct, what you netted can be used to calculate exactly what you owe. And yes, it's not the correct way to fill out your forms, but if during an audit it comes out you made a reasonable effort to pay the correct taxes, you'll get a lecture and some fines.
If you record your sessions and pay less than what you owe, you will be perceived as intentionally trying to dick the IRS, and that's extremely bad. Like jail bad. I argue it's even worse than not keeping records.
You need to keep a record of all "sessions." At the end of the year, add up all your winning sessions to get your gross winnings, and add up all your losing sessions to get your losses. Not doing so can cause at least two problems.
The first is that the IRS has something called the alternate minimum tax. That is the minimum tax rate you must pay regardless of your deductions (and gambling losses is deducted as an itemized deduction on Schedule A). So you could have won $10,000 net one year computed as $260,000 in winnings and $250,000 in loses. But your additional taxes caused by the gambling winnings is going to be way more than if you just claimed $10,000 in winnings--in fact, the federal taxes might increase more than your winnings.
The second is that if you normally take a standard deduction, your itemized deductions will have to make up the difference of what your itemized deductions would be without gambling and the standard deduction amount, before it impacts your taxable income. For example, in New York the standard deduction is $7,500, which I always take, as my itemized deductions would be less than $500. If I win $1000 gambling one year computed as $9,000 is winnings and $8,000 in losses, my gross income will increase $9,000, but my deductions will increase only $1000 (to $8,500, assuming only $500 in other deductions). So I would be paying state tax on $8000 in additional income even though I actually only had $1,000 in additional income.
The fair way is to report net income, but the tax laws are written to screw the taxpayer--especially if your doing something as socially horrible as gambling. But if you don't file your taxes correctly, the impact on the amount you pay can be much more than you might realize (fair or not), and the additional tax you have to pay, and the late fees and fines, could be much more than anticipated. Just be aware of the pit falls.
Having said all of that, I think the OP was more concerned with tracking the hands and how he played them, percentages and all that. Not keeping track of wins and losses which is easy to do with a pen and paper after a session.