Deducting meals from taxable income - Poker Legislation

ubiquitous · 01-22-2009, 03:22 PM

When filing as a pro what is acceptable regarding meal deductions?

3 examples:

a- Meals when you are out of town for a few days to play a tournament and/or cash games?

b- Meals when you are having lunch during a day of live play at your local casino?

c- Meals when you are just out with your poker playing friends discussing poker hands and strategy?

I'm trying to figure out where the line is drawn. Yes, I like to eat out a lot.

keith-atl · 01-22-2009, 03:27 PM

I doubt you can, I can't write off my meals when I am at work. When I travel my company pays for my meals but then again I don't think they exactly get to write those off either.

Anyways I highly doubt it, you have to eat regardless. No reason why you can't pack a sandwich like anyone else that works for a living.

Jimbo · 01-22-2009, 03:34 PM

http://www.irs.gov/publications/p334...blink100025386

Quote:

Meals and lodging. You can deduct the cost of meals and lodging if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. In most cases, you can deduct only 50% of your meal expenses.
Cleaning. You can deduct the costs of dry cleaning and laundry while on your business trip.
Telephone. You can deduct the cost of business calls while on your business trip, including business communication by fax machine or other communication devices.
Tips. You can deduct the tips you pay for any expense in this list.
More information. For more information about travel expenses, see Publication 463.
Entertainment expenses. You may be able to deduct business-related entertainment expenses for entertaining a client, customer, or employee. In most cases, you can deduct only 50% of these expenses.
The following are examples of entertainment expenses.
Entertaining guests at nightclubs, athletic clubs, theaters, or sporting events.

Providing meals, a hotel suite, or a car to business customers or their families.

To be deductible, the expenses must meet the rules listed in Table 8-1. For details about these rules, see Publication 463.

http://www.irs.gov/publications/p463/ch01.html#d0e820

Quote:

Meals

You can deduct the cost of meals in either of the following situations.

It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business.

The meal is business-related entertainment.

Business-related entertainment is discussed in chapter 2. The following discussion deals only with meals that are not business-related entertainment.

Lavish or extravagant. You cannot deduct expenses for meals that are lavish or extravagant. An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts.
50% limit on meals. You can figure your meals expense using either of the following methods.
Actual cost.

The standard meal allowance.

Both of these methods are explained below. But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals.
If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Chapter 2 discusses the 50% limit in more detail, and chapter 6 discusses accountable and nonaccountable plans.
Actual Cost

You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. If you use this method, you must keep records of your actual cost.

Standard Meal Allowance

Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on where and when you travel. In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance. If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. See the recordkeeping rules for travel in chapter 5.

ubiquitous · 01-22-2009, 04:15 PM

Thanks Jimbo. It looks like Yes for a.) and No for c.) in my examples.

What about b.) ? If I am playing at my local B & M for the day and grab lunch that's not considered "substantial rest to properly perform my duties"?

Jimbo · 01-22-2009, 04:21 PM

Quote:

Originally Posted by ubiquitous

Thanks Jimbo. It looks like Yes for a.) and No for c.) in my examples.

What about b.) ? If I am playing at my local B & M for the day and grab lunch that's not considered "substantial rest to properly perform my duties"?

B is a no

I'll add more, it is your normal place of business and you will eat somewhere anyway. Just like a regular employee cannot deduct his meals whether he eats at his desk or not.

MYMESSIAH · 01-22-2009, 06:42 PM

Quote:

Originally Posted by keith-atl

I doubt you can, I can't write off my meals when I am at work. When I travel my company pays for my meals but then again I don't think they exactly get to write those off either.

Anyways I highly doubt it, you have to eat regardless. No reason why you can't pack a sandwich like anyone else that works for a living.

He can't pack a sandwich because he is a baller. Do you think Phil Ivey packs a lunch?

tommyombomb · 01-22-2009, 06:50 PM

BRAG, think its sick that people in america have to pay taxes on winnings

in a lot of countries including ireland, it comes under the same category at the lottery etc which means its not taxed. think there is no tax on gambling winnings in ireland that i know of.

still not worth squat if your not winning constantly. also if i went to the WSOP etc and got in the money, no 40% cut for the greedy tax man because there is an agreement between ireland and the U.S over it. and yes people say what about the schools, roads, health-care but they survive with normal people who work.

i think its possible to play poker in ireland and still be able to claim social welfare which is a sweet top-up on rake-back and winnings lol

TeflonDawg · 01-22-2009, 10:44 PM

Quote:

Originally Posted by MYMESSIAH

He can't pack a sandwich because he is a baller. Do you think Phil Ivey packs a lunch?

snagglepuss · 01-25-2009, 07:47 PM

sadly all of my business related meals are very much 'lavish and extravagant'

keith-atl · 01-26-2009, 02:37 PM

Just a question, when people claim to be a pro that has to be their main source of income right?

You could take it a step further, if you are pro, you could write off a home office, part of your bathroom and kitchen sqft, since you make a living working from home playing poker.

I suggest you really try not to go crazy with writing too much off or it will raise a bunch of flags and dealing with the IRS on any level is the ultimate suck.

ubiquitous · 01-26-2009, 03:31 PM

Quote:

Originally Posted by keith-atl

Just a question, when people claim to be a pro that has to be their main source of income right?

You could take it a step further, if you are pro, you could write off a home office, part of your bathroom and kitchen sqft, since you make a living working from home playing poker.

I suggest you really try not to go crazy with writing too much off or it will raise a bunch of flags and dealing with the IRS on any level is the ultimate suck.

My understanding is that you take the square footage of the space where you play (not including kitchen/bathroom) divide by total home sq.ft. and use that % for your deduction.

redfisher · 01-27-2009, 11:32 PM

Quote:

Originally Posted by ubiquitous

My understanding is that you take the square footage of the space where you play (not including kitchen/bathroom) divide by total home sq.ft. and use that % for your deduction.

I'm not sure what the current IRS position is, but I've known people who had what I consider legitimate home offices disallowed as a deduction because the space either didn't have a separate entrance or wasn't 100% dedicated.

The case in particular I'm thinking of was a office supplies salesman who had no office at his employer's. His home office was disallowed as a spare bedroom because he had a bed in it.

keith-atl · 01-28-2009, 11:35 AM

Quote:

Originally Posted by redfisher

I'm not sure what the current IRS position is, but I've known people who had what I consider legitimate home offices disallowed as a deduction because the space either didn't have a separate entrance or wasn't 100% dedicated.

The case in particular I'm thinking of was a office supplies salesman who had no office at his employer's. His home office was disallowed as a spare bedroom because he had a bed in it.

My home office was 100% dedicated and you can write off part of the kitchen and bathroom you use.

Its not huge but a little, some people go to far and get a friendly visit from the IRS. All my business was legit, since I worked from home for another company.

Jimbo · 01-28-2009, 11:57 AM

Quote:

Originally Posted by keith-atl

My home office was 100% dedicated and you can write off part of the kitchen and bathroom you use.

Its not huge but a little, some people go to far and get a friendly visit from the IRS. All my business was legit, since I worked from home for another company.

You could also write off your doghouse but that doesn't mean that it is allowed by the IRS and neither will your kitchen or bathroom square footage be allowed either if you are audited. The home office usage requirement is quite clear, it must be exclusive to your business, not have additional purposes like eating or pooping.

ubiquitous · 01-28-2009, 02:41 PM

It always makes me feel good when I find out that my taxes are filed in compliance with Jimbo's standards and beliefs - because he knows his stuff.

I'm glad he's a tax expert and not a poker room floor manager.