Quote:
Originally Posted by Predator13
These details are from 2010 taxes and I bit the bullet on what I thought may be avoidable, but the situation will be similar this year so I thought I'd ask:
I am married and filing as a recreational poker player (because I have other full-time employment). My net poker income was ~$230k with $200k losses. The $200k, of course, gets listed as an itemized deduction for me and I forego the standard deduction.
However, I discovered that, even when filing separately, my wife is not able to take the standard deduction costing us a few thousand dollars. Is this avoidable? I thought the premise behind filing separately was that you would be able to file as if you were never married.
You can't do anything about it.
I was in the same situation for 2010 taxes and am for 2011 taxes.
I would take the standard deduction, but I need to itemize to get rid of gambling losses. I was doing this before I was married and my current wife was taking the standard deduction. Now we itemize because I need to deduct the gambling losses ... she loses the standard deduction she was taking. (Hopefully by 2012 tax time we'll have bought a house and have mortgage interest to deduct anyway. I'm assuming you and your wife don't currently have a mortgage ....)
My wife and I pay more taxes as a married couple than the sum of our taxes would be as single individuals precisely because of this issue. Looks like you and your wife do too.
And if you think about you'll realize that it makes sense to not let you file separate and have 1 itemize and the other take the standard deduction. Otherwise every married couple, where both individuals have some income, would file separately and have one spouse use all the itemized deductions and have the other use the standard deduction.
The thing that doesn't make sense is not just allowing you to net gambling wins and losses and report that as income instead of reporting gross wins and having the option to deduct gross losses.