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Did I pay too much in taxes? Did I pay too much in taxes?

04-05-2015 , 03:10 PM
I have a professional do my taxes...Living in Nevada if I made 60k would I owe around 15k? Or does that sound like way too much. I filed as a professional and had maybe almost 2-3k in write offs...
Did I pay too much in taxes? Quote
04-05-2015 , 04:44 PM
Here are a couple places you can plug in your tax return info roughly for free and to get a comparison:

http://www.taxact.com/

https://turbotax.intuit.com/
Did I pay too much in taxes? Quote
04-05-2015 , 04:46 PM
Or if you know your taxable income figure (Adjusted Gross Income minus deductions), here are the tax tables:

http://www.irs.gov/publications/p17/ar02.html

but you also have to add 12.4% self-employment tax, and there may be other adjustments for healthcare/health insurance.
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04-06-2015 , 12:40 PM
Since you filed as a professional, you have to pay 12.4% social security as well as 2.9% Medicare (so 15.3%). At those winnings, with very little write-offs, it would probably be more beneficial to file your gambling income as hobby/other income, rather than file as a professional.
Did I pay too much in taxes? Quote
04-06-2015 , 09:00 PM
Quote:
Originally Posted by zzimbile
Since you filed as a professional, you have to pay 12.4% social security as well as 2.9% Medicare (so 15.3%). At those winnings, with very little write-offs, it would probably be more beneficial to file your gambling income as hobby/other income, rather than file as a professional.
I'm not a cpa, but I doubt this is a choice. Then again, if by tax professional he meant Liberty Tax, well...
Did I pay too much in taxes? Quote
04-08-2015 , 12:29 PM
Quote:
Originally Posted by Land O Lakes
I'm not a cpa, but I doubt this is a choice. Then again, if by tax professional he meant Liberty Tax, well...
Income tax on $60k is far less than self-employment tax AND income tax on $60k. So if he filed as a professional gambler, he would probably owe the $15k like he stated (if not slightly more), instead of owing about $9k if he did not file in that manner.
Did I pay too much in taxes? Quote
04-08-2015 , 01:03 PM
Quote:
Originally Posted by zzimbile
Income tax on $60k is far less than self-employment tax AND income tax on $60k. So if he filed as a professional gambler, he would probably owe the $15k like he stated (if not slightly more), instead of owing about $9k if he did not file in that manner.
I understand that self-employment tax + income tax is > income tax, but if poker is his primary source of income, he has to file as a professional otherwise every self-employed person would be a hobbyist.
Did I pay too much in taxes? Quote
04-08-2015 , 01:28 PM
Quote:
Originally Posted by Land O Lakes
I understand that self-employment tax + income tax is > income tax, but if poker is his primary source of income, he has to file as a professional otherwise every self-employed person would be a hobbyist.
It's really a case-by-case basis. If he plays sporadically and is otherwise unemployed, then he can file as a hobby player. It would be more likely for the IRS to challenge his status as a professional, than as his status as an amateur. There are other stipulations than "primary source of income" (although this is one of the criteria) to determine status. If this was the only criteria, then anyone who ever won a tournament would be a professional, which just isn't the case.

There are many other factors to consider when filing and it is often beneficial to file as a professional instead of an amateur (such as NOLs and qualifying for the Earned Income Credit). I am not sure if the OP qualifies to file as an amateur, but it is something he should have considered.
Did I pay too much in taxes? Quote
04-08-2015 , 01:48 PM
Quote:
Originally Posted by zzimbile
It's really a case-by-case basis. If he plays sporadically and is otherwise unemployed, then he can file as a hobby player. It would be more likely for the IRS to challenge his status as a professional, than as his status as an amateur. There are other stipulations than "primary source of income" (although this is one of the criteria) to determine status. If this was the only criteria, then anyone who ever won a tournament would be a professional, which just isn't the case.

There are many other factors to consider when filing and it is often beneficial to file as a professional instead of an amateur (such as NOLs and qualifying for the Earned Income Credit). I am not sure if the OP qualifies to file as an amateur, but it is something he should have considered.
Sure, like I said, if he went to Liberty Tax, okay, but if a legit cpa did his taxes, then I would imagine this person checked for provisions such as he's unemployed and played poker 7 hours a week and made $60K. As written, he sounds like a guy that spends most of his working hours at the poker tables?
Did I pay too much in taxes? Quote
04-08-2015 , 02:00 PM
Quote:
Originally Posted by Land O Lakes
Sure, like I said, if he went to Liberty Tax, okay, but if a legit cpa did his taxes, then I would imagine this person checked for provisions such as he's unemployed and played poker 7 hours a week and made $60K. As written, he sounds like a guy that spends most of his working hours at the poker tables?
I'm not sure, too many things to consider given his initial post was very brief. You would be surprised how many "professionals" don't know much about gambling taxation. I am not saying that what he did was wrong, but if he could give us a little more information I'm sure we could figure it out.
Did I pay too much in taxes? Quote
04-09-2015 , 06:01 PM
Ya poker has been only income since 2009 with similar earnings...85k last year...
Did I pay too much in taxes? Quote
04-09-2015 , 06:18 PM
I would get in touch with the Nevada CPA society and see if they have any call-in resources for you.

https://www.nevadacpa.org/

We here in NJ have various days where CPA's who volunteer their time to man phone stations and help taxpayers.
Did I pay too much in taxes? Quote
04-14-2015 , 06:36 PM
Quote:
Originally Posted by asdfghjkl889
Ya poker has been only income since 2009 with similar earnings...85k last year...
If that's the case then you filed correctly and you just have to pay the man
Did I pay too much in taxes? Quote
04-18-2015 , 08:30 PM
Let's say you file as a professional .Can the blinds in a cash game that you pay in winning session be an expense? In tournaments the entry fee is an expense, and in cash games you can't play if you don't pay the blinds.
Of course if you are in a losing session they are already deducted. Thoughts?
Did I pay too much in taxes? Quote
04-19-2015 , 03:09 AM
Quote:
Originally Posted by biloxi22
Let's say you file as a professional .Can the blinds in a cash game that you pay in winning session be an expense? In tournaments the entry fee is an expense, and in cash games you can't play if you don't pay the blinds.
Of course if you are in a losing session they are already deducted. Thoughts?
No, and neither can the rake. Say you buyin for $1000 and you end your session with $1000. You posted $135 in blinds. You expect to be able to deduct $135 when you broke even in your session? Say you buyin for $1000 and you walk away with zero but paid $135 in blinds. Shouldn't you be able to take an $1135 loss under your proposal?

When you buyin a tournament for $1000 and cash for $3000, you are taxed on $2000. When you buyin to a cash game for $1000 and you walk away with $3000, you are taxed on $2000.
Did I pay too much in taxes? Quote
04-19-2015 , 06:23 AM
Quote:
Originally Posted by biloxi22
Let's say you file as a professional .Can the blinds in a cash game that you pay in winning session be an expense? In tournaments the entry fee is an expense, and in cash games you can't play if you don't pay the blinds.
Of course if you are in a losing session they are already deducted. Thoughts?
Whatever you paid in blinds, rake, etc. is already incorporated into your net win or loss for the session when you count up your money at the end of the session. If you also took the blinds as a separate expense, you would be deducting them twice.

Similarly, for a tournament you don't count the entry fee as an expense. If you don't cash in the tournament, you count your total buy-in including the tournament fee as a gambling loss (losing session). If you do cash in the tournament, your report your net win - your payout minus your total buy-in including the entry fee - as gambling winnings (winning session).

The poker room is supposed to give you an IRS Form W-2G for any net win over $5K. Make sure it shows this net amount as your winning amount, not the total payout amount. If you re-enter, the net amount should reflect that as well.
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