Careful paying off the debt too fast. I had about the same amount as you and was making decent money playing poker online. I threw money at 2 loans that were about 10% interest. paid off 30k in a year. then black friday hit. wish i had that 30k back and could just make minimum payments on those loans.

basically even though your making X amount now and paying off your loans is a good idea, make sure you always have a substantial cushion. pay off 2k a month in the first year, add to your roll, pay off 3k/month the next year. I think 3-4 year time frame is more realistic than 18 months

The way U.S. student loans work is that you will have minimum payments required by your student loan provider. At $90,000 I suspect you have a mixture of federal student loans (interest at 6.8%) and private loans (often variable, usually a lower interest rate). I would guess that your minimum monthly payment will be around $850/mo +-$100.

The optimal money saving plan is to make the minimum payments on the low interest loans while making higher payments on the federal loans at 6.8%. I would suggest focusing on one loan at a time to minimize your future monthly payment requirements. As far as balancing the amount of money you want to pay down monthly, that's really just a matter of your confidence in your poker game, risk tolerance for downswings, and the amount of liquid cash you want to keep available (i.e., suppose your favorite game dries up). If you're really playing as high as you say you are, you should be familiar enough with 2p2 that you can read up on how much money people deem necessary for bankrolls/liferolls.

No one is going to tell/suggest you not to pay the full amount of tax you owe because its illegal and if you severely under report you will be in serious legal trouble if they audit you and you have tons of unreported income. Having said that, I'd be shocked if people didn't under report their cash earnings.

Not super familiar with mortgages in the United States, but from reading 2p2 I think the consensus is that if you want to buy a house as a poker player you need to be able to provide banks with consistent yearly earnings (i.e., not 200K one year and 15k the following 3 years) and a substantial percentage of the house value as a downpayment. You should also think strongly about purchasing a house at your age, and whether or not it is a good financial decision.

/thread

With your hourly (which no offense could be wrong... Live takes a stupid amount of time to generate an accurate sample) you can afford to make the min payment while you move up stakes.

Moving up stakes has a much much much higher ROI than 6% if you're good. (which at 60 an hour you'd better be)

I know several long time poker pros (20+ years playing poker as their sole source of income). I'm pretty sure to a man they would all say that securing a fail proof bankroll will bring you much needed peace of mind and help you weather a brutal downswing. IMO you should pad your roll a bit more then focus on paying down the debt ASAP.

Why not just play poker for a living and default on the loan. If earning what you say, do it for the rest of your life.

What does that have to do with you paying taxes? Did your parents pay your taxes? I'm confused, does being a dependent make you not liable for taxes on your income? Might want to clarify this before you are back here next year asking how to best pay down your IRS bill

this makes sense to me. a bit riskier, but who cares if you're playing 5/10 and making 6bb / 35 hands

If you're a poker player you probably do NOT want to pay off the loan as soon as possible. Pay the minimum until you have so much money you can just pay off the whole thing in one shot, or put aside an amount, say 2k a month in cash, but also make the minimum payments. After 2 years, pay back half of it in one big payment to principal, keep the other half for emergency ("just in case" money). Wait another full year, do it again.

This provides multiple benefits

1) you are paying back the loan faster, just differently
2) you can effectively "reverse" at least a year's worth of those payments by simply not sending it in, if something catastrophically bad happens due to poker.

If you had a steady job you could probably do it the way you wanted to, but due to the nature of your income, I would err on the safer side. You have to protect yourself, and in this case that's making sure you have capital to continue making income. I can go broke every 2 weeks if I want, I know I have a paycheck coming. You can't do that, at least, not without a lot more risk.

Even if you go bankrupt in america, the student loans remain. You can't get rid of them. You're stuck with them for life.

* Open savings account
* Pay minimum to debt
* Put maximum possible in savings (not bankroll)
* Once you get enough to feel comfortable to pay off in lump sum, do so.

This way, if you have a catastrophic loss you can still tap into your savings. Downside is you need to be disciplined.

I would pay the minimum possible amount over the longest possible timeframe. The dollar will lose bundles of value over time, especially in this day and age.

The question is a math problem. You can deduct student loan interest above the line on your tax return up to $2,500, which changes the effective rate of interest. Your marginal tax rate is 28%, your effective rate is 21.3%. With your subsidized interest, your effective interest rate is 4.3%, which might sway your decision to pay off early or not.

This assumes income of 93,800, no change in tax rates from TY 2010 and SL interest rate of 6%.

Also, the more you pay now, the more quickly you reduce the effective interest rate. You can get the effective rate down to exactly what it is you consider a sufficiently low rate that you would save rather than pay down the debt.

itsme123, I think you have no idea what you are talking about.

Yea you still owe taxes on that income...regardless of Your "student" status. Student status just means you don't pay self employment tax. Eventually, if you kept crushing poker and remained a student...you'd also have too pay the self employment tax...ie file as a pro.

So put some aside for when you go too visit your accountant next year and he says too pay some back taxes

http://www.irs.gov/publications/p970/ch04.html

With his income level I don't think he will be able to deduct the student loan interest.

Yeah I think you are right. Looking back I also see that I suck at math, but the concept is correct.

students who are dependents of their parents do not have to file taxes if they don't have any "earnings". I never received a W2 last year or this year, so all my earning are cash, which i don't plan on filing since I am a student that lives at home. Starting next year I do plan to pay taxes, but was wondering if you guys thought it was best to add a certain percentage of earnings to pad the role, or just start dumping all earning to the loan.

i have a 45k role for 2-5 and 5-10 nl, but they recently started spreading 10-25 nl. my combined hourly in 2-5 and 5-10 is ~60/hr through 3k hrs, which I am aware it's live, but I'm comfortable with my sample size.

i do like the savings account idea, but i will be accumulating interest along the way.

thanks for all the responses by the way. much appreciated.

Admitting to tax evasion in a public forum is probably a bad idea. Talk to an accountant or EA. Russ Fox is a good one and posts here as Russ Fox. A lot of poker players use him. Shoot him a PM.

That's true enough. I was just trying to relate how great it felt to be out from under that burden.

You're self-employed - you will not receive a W2.

Basically your parents under-reported their income by 90K and owe about 30K.

You are committing tax evasion. You might get away with it but you are in the wrong and should pay what you owe.

Well if you knew what you were talking about you would know that Obama has passed laws making it easier for students to pay back their loans.

Student loans will only be paid back with a small percentage and the rest of the American public will pick up the rest of the tab. This will that make education more expensive but this is a discussion for a different time.

You do realize that tax evasion is a criminal matter. In other words, you could spend time in federal prison. If I were you, I'd beg a mod to delete a post that could land me in prison. The upside is that your student loan debt would seem significantly less important.

I believe you have to owe over 70k for the IRS to make it a criminal case so he should be safe in regards to that(Don't quote me on that but the number is around there). Plenty of fines, penalties, and interest if he is caught though. Criminal cases are extremely rare, but when they occur, the IRS wins a very large percentage of them.

We don't know how much tax fraud he has engaged in. He may very well owe over 70k in evaded taxes, esp. if his win rate is really $60 an hour and he's been playing for three years.

Do IRS agents constantly keep an eye out on 2+2 forums for tax evaders? Whats with the paranoia?