First off, when you say making a living, do you have another job or profession you are employed in. Secondly, is your professional gambling living just offshore or at Casinos? If you are "a professional", then make sure that you keep a listing of your daily wins and losses in writing, like a diary, because the IRS if audited will want to see something in writing, and not just your work of wins and losses. Something as simple as a log and possible receipts for expenses, et cetera.
There are several IRS rulings where to be a full time gambler is exactly that, where you have at least 60 percent of your income coming from gambling winnings. That is considered a full-time processional gambler and not employed elsewhere. Don't be taken in by IRS Pamphlets that might say otherwise, as that is not always the law.
First off, when you say making a living, do you have another job or profession you are employed in. Secondly, is your professional gambling living just offshore or at Casinos? If you are "a professional", then make sure that you keep a listing of your daily wins and losses in writing, like a diary, because the IRS if audited will want to see something in writing, and not just your work of wins and losses. Something as simple as a log and possible receipts for expenses, et cetera.
There are several IRS rulings where to be a full time gambler is exactly that, where you have at least 60 percent of your income coming from gambling winnings. That is considered a full-time processional gambler and not employed elsewhere. Don't be taken in by IRS Pamphlets that might say otherwise, as that is not always the law.
IRS Pamphlets are not the law, and not Tax Court rulings. All too often people think that if it is in an IRS Pamphlet, then that is the law. That is not the case.
Getting back to taxes for gambling winnings. If you are talking about offshore, then youa re not going to receive anything at the end of the year from offshore books.
Professional gambling and reporting of income and losses is a touchy thing with the IRS. All too often I have seen where the person is a weekend "professional gambler" and less than 60 percent comes from winnings or losses, and then tries to claim the losses against their other "non-professional" income. It doesn't work if you get audited. a Professional gambler is exactly what the term might imply. No other income from another source of employment, and not weekends or a part-time professional. A full-time profession, with proof of expenses (not your word) and proof of losses (not your word), or winnings (approximate tax forms).
Good luck if you want that lifestyle, but 90 percent don't make it.
IRS Pamphlets are not the law, and not Tax Court rulings. All too often people think that if it is in an IRS Pamphlet, then that is the law. That is not the case.
Getting back to taxes for gambling winnings. If you are talking about offshore, then youa re not going to receive anything at the end of the year from offshore books.
Professional gambling and reporting of income and losses is a touchy thing with the IRS. All too often I have seen where the person is a weekend "professional gambler" and less than 60 percent comes from winnings or losses, and then tries to claim the losses against their other "non-professional" income. It doesn't work if you get audited. a Professional gambler is exactly what the term might imply. No other income from another source of employment, and not weekends or a part-time professional. A full-time profession, with proof of expenses (not your word) and proof of losses (not your word), or winnings (approximate tax forms).
Good luck if you want that lifestyle, but 90 percent don't make it.
Let's say you make $50,000 after bets and winnings, and that is your net $50,000. Did you receive any 1099s from casinos for wins over a certain amount? If so, then you will have to report that on your tax return, and not necessarily what you can't prove in writing about other winnings or losses. Expenses are another thing. If you are living in Nevada and are a Nevada resident, then there is no State taxes. If you are living in another State, you would have to pay the approximate taxes.
I have seen too many people declare a loss on their taxes year after year as a professional gambler and employed as well, and then are completely taken by surprise when they can't declare expenses and losses from their "professional gambling."
Let's say you make $50,000 after bets and winnings, and that is your net $50,000. Did you receive any 1099s from casinos for wins over a certain amount? If so, then you will have to report that on your tax return, and not necessarily what you can't prove in writing about other winnings or losses. Expenses are another thing. If you are living in Nevada and are a Nevada resident, then there is no State taxes. If you are living in another State, you would have to pay the approximate taxes.
I have seen too many people declare a loss on their taxes year after year as a professional gambler and employed as well, and then are completely taken by surprise when they can't declare expenses and losses from their "professional gambling."
I am in vegas 7 times a year for the Tax Court and am on the road 40 weeks a year in tax court cases. They will give you the same advice, plus the fees for that info.
If you don't receive any tax forms from casinos for winnings over a certain amount, then you only have what you will report as truthful winnings, and then the losses, and expenses. I would have to say I know of very few who will report their winnings, sans, losses, expenses as a professional gambler, if they don't receive anything from casinos.
Poker professionals who enter tournaments will receive a tax form and their earnings reported. Sports betting is another matter. Winning $50 thousand from sports betting is an excellent income for that endeavor, but without something else backing you up financially, it is a long trip down the road to nowhere.
I am in vegas 7 times a year for the Tax Court and am on the road 40 weeks a year in tax court cases. They will give you the same advice, plus the fees for that info.
If you don't receive any tax forms from casinos for winnings over a certain amount, then you only have what you will report as truthful winnings, and then the losses, and expenses. I would have to say I know of very few who will report their winnings, sans, losses, expenses as a professional gambler, if they don't receive anything from casinos.
Poker professionals who enter tournaments will receive a tax form and their earnings reported. Sports betting is another matter. Winning $50 thousand from sports betting is an excellent income for that endeavor, but without something else backing you up financially, it is a long trip down the road to nowhere.
Everything said so far is true and accurate..... but to add a couple of things.....
There are 2 ways to file gambling income: the first is as described above, on a schedule C as a professional gambler - and the second is to declare the income on line 21 of your 1040 as "other income". There are advantages and disadvantages to each.
Filing as a professional gambler (schedule C):
* You can write off expenses
* You are responsible for self employment taxes ie fica and SS (15.4% additional)
* There is a burden of proof on you from the IRS that this is a business, and that you are professional.
* High likelihood of audit.
* Mostly used by people whose business expenses will reduce their income to the point that outweighs the additional SE tax.
Filing as a hobby gambler (line 21 of 1040):
* You cannot write off expenses.
* You are not subject to the self employment taxes.
* You can write off your losses up to the point of your wins (cant go negative) on Schedule A.
* Lower likelihood of audit.
* Can artificially raise your adjusted gross income and can make you artifically succeptable to alternative minimum tax (not likely).
* Mostly used by people with not enough gambling related expenses to make up for the SE tax.
All of that being said, you need a gambling diary either way - even better if it is backed up with a cash flow. To all of the dopes who say "go to the sportsbook and pick up losing tickets" - the first thing the IRS will do is ask "how did you pay for those tickets"? It is best if you have a diary and a money trail.
Also - the IRS has occasionally told hobby gamblers that they need to file as professionals, and vice versa!! The burden of proof is on YOU - and the IRS is going to ask you to file the way that they think they will get the most out of you. In your case, I wouldnt worry about it, but if you won for 5 years in a row - maybe.
Everything said so far is true and accurate..... but to add a couple of things.....
There are 2 ways to file gambling income: the first is as described above, on a schedule C as a professional gambler - and the second is to declare the income on line 21 of your 1040 as "other income". There are advantages and disadvantages to each.
Filing as a professional gambler (schedule C):
* You can write off expenses
* You are responsible for self employment taxes ie fica and SS (15.4% additional)
* There is a burden of proof on you from the IRS that this is a business, and that you are professional.
* High likelihood of audit.
* Mostly used by people whose business expenses will reduce their income to the point that outweighs the additional SE tax.
Filing as a hobby gambler (line 21 of 1040):
* You cannot write off expenses.
* You are not subject to the self employment taxes.
* You can write off your losses up to the point of your wins (cant go negative) on Schedule A.
* Lower likelihood of audit.
* Can artificially raise your adjusted gross income and can make you artifically succeptable to alternative minimum tax (not likely).
* Mostly used by people with not enough gambling related expenses to make up for the SE tax.
All of that being said, you need a gambling diary either way - even better if it is backed up with a cash flow. To all of the dopes who say "go to the sportsbook and pick up losing tickets" - the first thing the IRS will do is ask "how did you pay for those tickets"? It is best if you have a diary and a money trail.
Also - the IRS has occasionally told hobby gamblers that they need to file as professionals, and vice versa!! The burden of proof is on YOU - and the IRS is going to ask you to file the way that they think they will get the most out of you. In your case, I wouldnt worry about it, but if you won for 5 years in a row - maybe.
As far as I know, the purpose of this thread was not to discuss evading taxes.
You are responsible for reporting your income. You have to show all of your income to the IRS, whether it is gambling or otherwise. If you choose not to disclose your income, that is your choice, but the IRS expects you to.
As far as I know, the purpose of this thread was not to discuss evading taxes.
You are responsible for reporting your income. You have to show all of your income to the IRS, whether it is gambling or otherwise. If you choose not to disclose your income, that is your choice, but the IRS expects you to.
As far as I know, the purpose of this thread was not to discuss evading taxes.
You are responsible for reporting your income. You have to show all of your income to the IRS, whether it is gambling or otherwise. If you choose not to disclose your income, that is your choice, but the IRS expects you to.
As far as I know, the purpose of this thread was not to discuss evading taxes.
You are responsible for reporting your income. You have to show all of your income to the IRS, whether it is gambling or otherwise. If you choose not to disclose your income, that is your choice, but the IRS expects you to.
If it was for work, you would still have to declare it as income from "independent contracting" or whatever on Schedule C. As a general rule, anytime anybody gives you anything you are supposed to report it as income in one form or another for taxes.
If it was for work, you would still have to declare it as income from "independent contracting" or whatever on Schedule C. As a general rule, anytime anybody gives you anything you are supposed to report it as income in one form or another for taxes.
Line 21 of your 1040 is where you declare your wins, schedule A is where you declare your losses.
You dont need an accountant for this. It is fairly straightforward, and chances are after reading this thread you know more about it than an accountant anyway. You are not a professional gambler, you are a hobby gambler, as are 99% of people who declare gambling income.
Turbotax actually asks these questions - and is set up to handle gambling income.
Line 21 of your 1040 is where you declare your wins, schedule A is where you declare your losses.
You dont need an accountant for this. It is fairly straightforward, and chances are after reading this thread you know more about it than an accountant anyway. You are not a professional gambler, you are a hobby gambler, as are 99% of people who declare gambling income.
Turbotax actually asks these questions - and is set up to handle gambling income.
I'd be willing to bet you are not eligible to pay taxes on gambling winnings.
Just a hunch.
I'd be willing to bet you are not eligible to pay taxes on gambling winnings.
Just a hunch.
Everything said so far is true and accurate..... but to add a couple of things.....
There are 2 ways to file gambling income: the first is as described above, on a schedule C as a professional gambler - and the second is to declare the income on line 21 of your 1040 as "other income". There are advantages and disadvantages to each.
Filing as a professional gambler (schedule C):
* You can write off expenses
* You are responsible for self employment taxes ie fica and SS (15.4% additional)
* There is a burden of proof on you from the IRS that this is a business, and that you are professional.
* High likelihood of audit.
* Mostly used by people whose business expenses will reduce their income to the point that outweighs the additional SE tax.
Filing as a hobby gambler (line 21 of 1040):
* You cannot write off expenses.
* You are not subject to the self employment taxes.
* You can write off your losses up to the point of your wins (cant go negative) on Schedule A.
* Lower likelihood of audit.
* Can artificially raise your adjusted gross income and can make you artifically succeptable to alternative minimum tax (not likely).
* Mostly used by people with not enough gambling related expenses to make up for the SE tax.
All of that being said, you need a gambling diary either way - even better if it is backed up with a cash flow. To all of the dopes who say "go to the sportsbook and pick up losing tickets" - the first thing the IRS will do is ask "how did you pay for those tickets"? It is best if you have a diary and a money trail.
Also - the IRS has occasionally told hobby gamblers that they need to file as professionals, and vice versa!! The burden of proof is on YOU - and the IRS is going to ask you to file the way that they think they will get the most out of you. In your case, I wouldnt worry about it, but if you won for 5 years in a row - maybe.
Everything said so far is true and accurate..... but to add a couple of things.....
There are 2 ways to file gambling income: the first is as described above, on a schedule C as a professional gambler - and the second is to declare the income on line 21 of your 1040 as "other income". There are advantages and disadvantages to each.
Filing as a professional gambler (schedule C):
* You can write off expenses
* You are responsible for self employment taxes ie fica and SS (15.4% additional)
* There is a burden of proof on you from the IRS that this is a business, and that you are professional.
* High likelihood of audit.
* Mostly used by people whose business expenses will reduce their income to the point that outweighs the additional SE tax.
Filing as a hobby gambler (line 21 of 1040):
* You cannot write off expenses.
* You are not subject to the self employment taxes.
* You can write off your losses up to the point of your wins (cant go negative) on Schedule A.
* Lower likelihood of audit.
* Can artificially raise your adjusted gross income and can make you artifically succeptable to alternative minimum tax (not likely).
* Mostly used by people with not enough gambling related expenses to make up for the SE tax.
All of that being said, you need a gambling diary either way - even better if it is backed up with a cash flow. To all of the dopes who say "go to the sportsbook and pick up losing tickets" - the first thing the IRS will do is ask "how did you pay for those tickets"? It is best if you have a diary and a money trail.
Also - the IRS has occasionally told hobby gamblers that they need to file as professionals, and vice versa!! The burden of proof is on YOU - and the IRS is going to ask you to file the way that they think they will get the most out of you. In your case, I wouldnt worry about it, but if you won for 5 years in a row - maybe.
Everything said so far is true and accurate..... but to add a couple of things.....
There are 2 ways to file gambling income: the first is as described above, on a schedule C as a professional gambler - and the second is to declare the income on line 21 of your 1040 as "other income". There are advantages and disadvantages to each.
Filing as a professional gambler (schedule C):
* You can write off expenses
* You are responsible for self employment taxes ie fica and SS (15.4% additional)
* There is a burden of proof on you from the IRS that this is a business, and that you are professional.
* High likelihood of audit.
* Mostly used by people whose business expenses will reduce their income to the point that outweighs the additional SE tax.
Filing as a hobby gambler (line 21 of 1040):
* You cannot write off expenses.
* You are not subject to the self employment taxes.
* You can write off your losses up to the point of your wins (cant go negative) on Schedule A.
* Lower likelihood of audit.
* Can artificially raise your adjusted gross income and can make you artifically succeptable to alternative minimum tax (not likely).
* Mostly used by people with not enough gambling related expenses to make up for the SE tax.
All of that being said, you need a gambling diary either way - even better if it is backed up with a cash flow. To all of the dopes who say "go to the sportsbook and pick up losing tickets" - the first thing the IRS will do is ask "how did you pay for those tickets"? It is best if you have a diary and a money trail.
Also - the IRS has occasionally told hobby gamblers that they need to file as professionals, and vice versa!! The burden of proof is on YOU - and the IRS is going to ask you to file the way that they think they will get the most out of you. In your case, I wouldnt worry about it, but if you won for 5 years in a row - maybe.
so in your losing years (and everyone whose seen your NFL and CFB picks on covers knows youve had several of those)..youre losing what your losing, and in your winning years your handing over 20-30% of your profits in tax payments, yet youre still making a living gambling?
Everything said so far is true and accurate..... but to add a couple of things.....
There are 2 ways to file gambling income: the first is as described above, on a schedule C as a professional gambler - and the second is to declare the income on line 21 of your 1040 as "other income". There are advantages and disadvantages to each.
Filing as a professional gambler (schedule C):
* You can write off expenses
* You are responsible for self employment taxes ie fica and SS (15.4% additional)
* There is a burden of proof on you from the IRS that this is a business, and that you are professional.
* High likelihood of audit.
* Mostly used by people whose business expenses will reduce their income to the point that outweighs the additional SE tax.
Filing as a hobby gambler (line 21 of 1040):
* You cannot write off expenses.
* You are not subject to the self employment taxes.
* You can write off your losses up to the point of your wins (cant go negative) on Schedule A.
* Lower likelihood of audit.
* Can artificially raise your adjusted gross income and can make you artifically succeptable to alternative minimum tax (not likely).
* Mostly used by people with not enough gambling related expenses to make up for the SE tax.
All of that being said, you need a gambling diary either way - even better if it is backed up with a cash flow. To all of the dopes who say "go to the sportsbook and pick up losing tickets" - the first thing the IRS will do is ask "how did you pay for those tickets"? It is best if you have a diary and a money trail.
Also - the IRS has occasionally told hobby gamblers that they need to file as professionals, and vice versa!! The burden of proof is on YOU - and the IRS is going to ask you to file the way that they think they will get the most out of you. In your case, I wouldnt worry about it, but if you won for 5 years in a row - maybe.
so in your losing years (and everyone whose seen your NFL and CFB picks on covers knows youve had several of those)..youre losing what your losing, and in your winning years your handing over 20-30% of your profits in tax payments, yet youre still making a living gambling?
20-30 percent in taxes is a good estimate. You are required to claim whatever you won. Whether the casino sends you something or not, makes zero difference.
20-30 percent in taxes is a good estimate. You are required to claim whatever you won. Whether the casino sends you something or not, makes zero difference.
Nobody knows the specifics of IRS audit formulas. You can only guess. You are SUPPOSED to put all of your winnings on line 21, and deduct all of your losses on sched A. The net difference of doing it your way or doing it the IRS way is probably negligible, I doubt they would come after you for that even if they audited you.
Nobody knows the specifics of IRS audit formulas. You can only guess. You are SUPPOSED to put all of your winnings on line 21, and deduct all of your losses on sched A. The net difference of doing it your way or doing it the IRS way is probably negligible, I doubt they would come after you for that even if they audited you.
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