Algorand > Ether

MLYLT -

Anytime - I hope it assisted you in determining how YOU ultimately decide to handle your personal finance. Perhaps that includes hiring professionals to assist or developing/implementing your own plan.

As far as REITs - I'm not well versed enough to offer any investment guidance on them. For the reasons above - if given the option of vehicles, I would choose a ROTH due to the tax benefits. REIT's are often seen as a 'hedge' (not in exact sense) to the market, because history of performance isn't as correlated as other options, albeit perhaps seen as risky. It sounds as though you developed a thesis as why you believe this would be a good investment - perhaps, rather than investing currently, track a few REITs to see their performance. This will get you more comfortable in how they work, their risks, prior data, etc. In other words, develop a solid knowledge base on REITs as a whole & the industries in which they operate (IE., Health Care, Residential, Shopping Centers, etc.)

As other posters mentioned - you should weight the cost/benefits of how to allocate your savings given your current and future financial situation. Also, which is obvious - utilize all the information available - internet, books, etc. but make yourself a filter to decide whether this information is useful or more 'noise'. At the end of the day, especially if you choose to invest on your own, make sure you know everything there is to know about the investment you choose to make.

As with poker, your decisions should generally hinge on risk, both present and future. Is it worth the risk of investing in REITs while you have loans outstanding at 10%?

What are your thoughts on employee stock purchase plans in general? I've been parking about 5% in mine (moved over car payment value when I paid that off) for 10% discount on stock purchased twice a year. I'm maxing my 401k and HSA already.

Should I aim to hold the stock for at least a year to hit lt capital gains rate or be looking to churn it into an index fund for long term holding more quickly?

Would you consider yourself the greatest Over The Fence player in Henry Horner history?

Hey Trauma -

A lot of plans are company dependent, but I think this article explains them better than I can: https://blog.wealthfront.com/good-espp-no-brainer/

Haha, well if you're asking then I'm sure you know the answer! No idea who this is, but I'll guess Brad?

Good guess. Glad you're doing well. Will have to hit up the Horseshoe for PLO sometime in the future.

Hey man - thanks, I hope everything is going well on your end!

Sounds like a plan once the casinos starts opening up. Hopefully it calls for the return of a well rested Big Mike.

I'll reach out to catch up soon sir!

Yeah don’t end up like my dump ass and sell as soon as you can after buying and take the capital gains taxes. I use to always wait to avoid capital gains and then sell. Than I was like I’ll wait until the stock hits x amount. Stock kept dropping, I kept buying. Before I knew it stock value was less than half my purchased price and I was holding way too much. This over a period where I would of doubled my my money in an index fund.

Looks like you need to expand your job search area. DFW is a huge job market for you. Prepare to move to the less backwoods area of DFW. Or take a chance and just get out of DFW.

I live an hour from LA. I go there often for poker and get a hotel room. Can I take the hotel rooms as a deduction?

Hey Dark -

Are you a 'professional' and report on Schedule C?

Hey Kibz, thanks for doing this thread.
So I filed as a pro gambler last year. I read a book by Russell Fox(tax guy who specializes in gamblers). I have a lot of expenses, is quickbooks self employed a good thing to use to keep track? One more quick question, do I need to pay quarterly taxes?
I expect that
1. I'll owe more than 1k
2. My withholding and refundable credits will cover less than 90% of my tax liability for this year

When I google "do I need to pay quarterly taxes" those 2 points seem to come up a lot. How does a professional gambler really ever know what's going to happen though?

Hey Ship -

No problem. Sure, there are a bunch of great apps available to assist with tracking expenses, bookkeeping, etc. and the Intuit brand is one of the most well-respected.

From the sounds of it, you would have to pay quarterly taxes in order to avoid late penalty fees. Most self-employed individuals find this a burden, but often times, when I explain that W-2 employees often withhold taxes bi-weekly rather than quarterly, it becomes more understandable.

As long as you plan to owe at least $1,000 in taxes, by utilizing the Safe Harbor rules provided by the IRS, you can generally ensure a penalty-free return (you'd be surprised how many people willingly pay the fines). The Safe Harbor states that if you withhold at least 90% of current year taxes or 100% (110% for higher AGI earners) of previous year taxes or expect your taxes to be <$1,000 after subtracting withholdings and credits, you should avoid owing any penalty.

Here's more information by the IRS regarding estimated taxes that may be helpful: https://www.irs.gov/businesses/small...stimated-taxes

Hey Ship -

Sorry, I neglected the last part of your question. The quarterly estimated taxes can be made on an as-needed basis and originally discussed or planned amounts with your accountant is not binding.

For example, 1st quarter estimates are due roughly at the same time as the previous years tax return is due; therefore, both are often paid around the same time. If most of your 'extra' income is predictable investment interest and dividends, it may be easy to estimate the 4 quarterly amounts in advance, and more often than not, will require minimal tweaking.

However, in your case, poker earnings are far from predictable. The government is aware of this and allows you to 'annualize' your estimated payments in the case that your income was not earned evenly throughout the year. For example, if you have no income after the 1st quarter, I don't think it makes sense to withhold any taxes on 'phantom' income you do not have. When I was a poker pro, I would evaluate my P&L quarterly and if needed, would make a calculated withholding while keeping the safe harbor rules in mind.

I guess this is a long-winded way of stating it's not a perfect science when the estimated taxes are highly variable. My only guidance would just be to pay as you go and adjust accordingly. Depending on your situation, the fee/penalty may not be material to you and even worth the time to plan around (I've tried to assist a few clients in minimizing the penalty but they insist on their willingness to pay a small penalty for not having to deal with estimates). Or, I have clients who pay everything in the 4th quarter even though the income was earned throughout the year. Although they run the risk of late payment interest that accrued in earlier quarters if income was earned then, by paying the tax due at year end, the late payment interest on taxes owed stops.

Note: If you have a down year, look at it more as an opportunity to withhold less throughout the following year (since you'll have to pay either 100% or 110% of your 'down' year tax amount to meet the Safe Harbor Rules) without the risk of penalties/interest. Utilize this opportunity to generate income that will help pay for your future tax ball.

Hey, thanks for doing this! Got a quick question: Am I able to claim the foreign earned income exclusion? I spent over 330 days outside the USA (in Mexico and Brazil), but don't have residency in either country and don't pay taxes outside the USA.

Yeah, re the underestimated tax penalty, I usually advise my clients to hold their cash. The penalty rate averages around .5%-1.5% of the balance due, and most people are willing to hold cash and pay the penalty. As a professional gambler, that would definitely be worth a hold to me.

How is the average .5%-1.5% of the balance due? I keep seeing the figure 3.398%.
Please explain. Thanks.

I've never done estimated payments before and never had to pay a penalty but I decided to start this year just in case. But if the penalty is only 3.39% or as low 0.5% it seems like it's a no brainer to just invest the money and pay it later...

Hey Fossilkid -

I believe that you don't have to be a resident of another country if you meet the 'physical presence tests'. (If you haven't, confirm you pass the 12 month test).

In reading the IRS publication, I don't seem to come across anything that says you don't; however, let me reach out to a friend who is in a similar situation to confirm.

OK, one thing that gives me pause is this tidbit on the IRS site that states the foreign country must be my tax home since I'm not gonna be paying taxes in Mexico. I guess maybe that disqualifies me?

I agree - the wording by the IRS, per usual, makes things more complicated. I've reached out to my buddy who meets the test so I'll confirm when he gets back to me.

OTOH, I listened to a Russ Fox podcast and here at 47:25 he seems to imply that it can be claimed by anyone who is either a foreign resident or outside the USA for 330+ days, nothing mentioned about a tax home.

LV Advisor podcast

Hey Fossil -

My buddy is neither a citizen/files a return in Costa Rica & utilizes this strategy with his accountant.

The only point to highlight is he is living there (for the past 5 years) on 3 months visas, which may provide the needed 'foreign' compliance w/ the government.

Thanks dude - appreciate it.