Professional Sportsbetting

[accountinquestion]

You don’t have to declare as a professional gambler regardless of how much you win if you have other sources of income. It’s actually best to take your gambling winnings, and invest them into income producing assets that have tax advantages. A good accountant will save you tons. I was taught this year one from a old school AP even tho he may not have followed his own advice. Some may disagree but it’s probably because they don’t know how to go about it.

As with everything for gamblers involving money efficiency, I've experienced this a bit differently. For 10 years I filed as a professional gambler who had other sources of income. The gambling required a lot of traveling, which translated into lots of expenses. I maintained a full-time rental or leased car during that time, and all my expenses during those years were direct write-off credits to income. This made a huge difference in what I paid in taxes each year. I never explored the possible advantages you mentioned, however, because I was taking guidance from my son-in-law, who is an IRS employee. His suggestions made the yearly filings tolerable.

The few people that I know in similar situations have all been ruled not professional gamblers by the IRS. It is best for a person to not deduct any expenses and just adjust win/loss records accordingly.

Also, filing as a professional gambler comes with a host of problems. The additional 15% self employment tax being the major one.

I pay the 15% regardless on my income? I still learn about taxes but are you saying you can claim gambling winnings without paying the 15%?

I just learned about the solo401k this year. I can put around 60k in it tax free. Sweeet.

[MaxPen]

As with everything for gamblers involving money efficiency, I've experienced this a bit differently. For 10 years I filed as a professional gambler who had other sources of income. The gambling required a lot of traveling, which translated into lots of expenses. I maintained a full-time rental or leased car during that time, and all my expenses during those years were direct write-off credits to income. This made a huge difference in what I paid in taxes each year. I never explored the possible advantages you mentioned, however, because I was taking guidance from my son-in-law, who is an IRS employee. His suggestions made the yearly filings tolerable.

The few people that I know in similar situations have all been ruled not professional gamblers by the IRS. It is best for a person to not deduct any expenses and just adjust win/loss records accordingly.

Also, filing as a professional gambler comes with a host of problems. The additional 15% self employment tax being the major one.

I pay the 15% regardless on my income? I still learn about taxes but are you saying you can claim gambling winnings without paying the 15%?

I just learned about the solo401k this year. I can put around 60k in it tax free. Sweeet.

If you're a professional gambler that is unincorporated you are filing your wins, losses, and expenses on Schedule C just like any other sole proprietor. You pay 15.3% self employment tax on top of your regular income tax.

If you're not a pro your wins and losses net result will be filed on Schedule A. You are only subject to income tax according to your tax bracket on that. No additional self employment tax. You cannot claim losses until you meet your standard deduction under this scenario. You will not pay self employment tax in addition to income tax under this scenario.

The IRS gets real squirrelly once an individual starts claiming professional and deducting expenses. Especially in a case such as Singer's claim. I have seen the few people that tried what he was claiming he did for ten years denied professional status. A person would only even want to attempt it if they were already maxing out social security anyhow. But most likely in that scenario they would fail to meet IRS qualifications.

[Rob.Singer]

The few people that I know in similar situations have all been ruled not professional gamblers by the IRS. It is best for a person to not deduct any expenses and just adjust win/loss records accordingly.

Also, filing as a professional gambler comes with a host of problems. The additional 15% self employment tax being the major one.

I pay the 15% regardless on my income? I still learn about taxes but are you saying you can claim gambling winnings without paying the 15%?

I just learned about the solo401k this year. I can put around 60k in it tax free. Sweeet.

If you're a professional gambler that is unincorporated you are filing your wins, losses, and expenses on Schedule C just like any other sole proprietor. You pay 15.3% self employment tax on top of your regular income tax.

If you're not a pro your wins and losses net result will be filed on Schedule A. You are only subject to income tax according to your tax bracket on that. No additional self employment tax. You cannot claim losses until you meet your standard deduction under this scenario. You will not pay self employment tax in addition to income tax under this scenario.

The IRS gets real squirrelly once an individual starts claiming professional and deducting expenses. Especially in a case such as Singer's claim. I have seen the few people that tried what he was claiming he did for ten years denied professional status. A person would only even want to attempt it if they were already maxing out social security anyhow. But most likely in that scenario they would fail to meet IRS qualifications.

There's numerous variables involved based on individual circumstances and it's not as simple as you're saying. Also, your "maxing out on SS comment is unclear". I wasn't receiving it yet during 2000-2009.

I did go thru 2 audits while I was filing schedule C's, and the concern about being denied status never entered into the discussion. No problems were found in either audit other than a minor addition error that netted me an $850 refund check upon completion of the first audit. I attribute all this to the guidance and answered questions I received as I filed.

Most here and you especially don't want to hear this and I'm not gonna argue it further. These audits were both during my DU play years when I was profiting at least $500k/yr. I requested IRS advice and went at it without playing tax games or making multiple passes like most gambling w2g people who file Schedule A's do. The expenses deductions I took were maximized to their furthest limits. Some I had to see the actual provisions in the IRS manuals to believe. The Arizona auditors were not as astute as Nevada's would be at the time due to the comparative numbers of professional gamblers filing, and I used that to my advantage where I could. But by far, the two most overwhelmingly important tactics were: to have detailed and traceable contemporaneous records & numbers from A to Z; and to treat every auditor with respect--no matter how much of an asshole or how frustratingly dense they were.

Finally, with the effects on the large increase to AGI, no matter if losses deducted on schedule A equaled winnings claimed on the 1040--and with that pesky AMT always looming in the background in these types of situations (as well as my being a writer, trainer and consultant) Schedule C was always the most advantageous.

[MaxPen]

I pay the 15% regardless on my income? I still learn about taxes but are you saying you can claim gambling winnings without paying the 15%?

I just learned about the solo401k this year. I can put around 60k in it tax free. Sweeet.

If you're a professional gambler that is unincorporated you are filing your wins, losses, and expenses on Schedule C just like any other sole proprietor. You pay 15.3% self employment tax on top of your regular income tax.

If you're not a pro your wins and losses net result will be filed on Schedule A. You are only subject to income tax according to your tax bracket on that. No additional self employment tax. You cannot claim losses until you meet your standard deduction under this scenario. You will not pay self employment tax in addition to income tax under this scenario.

The IRS gets real squirrelly once an individual starts claiming professional and deducting expenses. Especially in a case such as Singer's claim. I have seen the few people that tried what he was claiming he did for ten years denied professional status. A person would only even want to attempt it if they were already maxing out social security anyhow. But most likely in that scenario they would fail to meet IRS qualifications.

There's numerous variables involved based on individual circumstances and it's not as simple as you're saying. Also, your "maxing out on SS comment is unclear". I wasn't receiving it yet during 2000-2009.

I did go thru 2 audits while I was filing schedule C's, and the concern about being denied status never entered into the discussion. No problems were found in either audit other than a minor addition error that netted me an $850 refund check upon completion of the first audit. I attribute all this to the guidance and answered questions I received as I filed.

Most here and you especially don't want to hear this and I'm not gonna argue it further. These audits were both during my DU play years when I was profiting at least $500k/yr. I requested IRS advice and went at it without playing tax games or making multiple passes like most gambling w2g people who file Schedule A's do. The expenses deductions I took were maximized to their furthest limits. Some I had to see the actual provisions in the IRS manuals to believe. The Arizona auditors were not as astute as Nevada's would be at the time due to the comparative numbers of professional gamblers filing, and I used that to my advantage where I could. But by far, the two most overwhelmingly important tactics were: to have detailed and traceable contemporaneous records & numbers from A to Z; and to treat every auditor with respect--no matter how much of an asshole or how frustratingly dense they were.

Finally, with the effects on the large increase to AGI, no matter if losses deducted on schedule A equaled winnings claimed on the 1040--and with that pesky AMT always looming in the background in these types of situations (as well as my being a writer, trainer and consultant) Schedule C was always the most advantageous.

You're a master class in bullshit.

I will not waste time arguing anything with you because there is no point. I will quickly point out one thing from the above quote. What would a state auditor have to do with anything federal? Nevada doesn't even have anything to audit because there is no state income tax.

[regnis]

The few people that I know in similar situations have all been ruled not professional gamblers by the IRS. It is best for a person to not deduct any expenses and just adjust win/loss records accordingly.

Also, filing as a professional gambler comes with a host of problems. The additional 15% self employment tax being the major one.

I pay the 15% regardless on my income? I still learn about taxes but are you saying you can claim gambling winnings without paying the 15%?

I just learned about the solo401k this year. I can put around 60k in it tax free. Sweeet.

If you're a professional gambler that is unincorporated you are filing your wins, losses, and expenses on Schedule C just like any other sole proprietor. You pay 15.3% self employment tax on top of your regular income tax.

If you're not a pro your wins and losses net result will be filed on Schedule A. You are only subject to income tax according to your tax bracket on that. No additional self employment tax. You cannot claim losses until you meet your standard deduction under this scenario. You will not pay self employment tax in addition to income tax under this scenario.

The IRS gets real squirrelly once an individual starts claiming professional and deducting expenses. Especially in a case such as Singer's claim. I have seen the few people that tried what he was claiming he did for ten years denied professional status. A person would only even want to attempt it if they were already maxing out social security anyhow. But most likely in that scenario they would fail to meet IRS qualifications.

Slight correction---wins go on 1040 as other income. The deduction for losses is on Schedule A. The Schedule A deduction is limited to the win shown as other income.

[MaxPen]

I pay the 15% regardless on my income? I still learn about taxes but are you saying you can claim gambling winnings without paying the 15%?

I just learned about the solo401k this year. I can put around 60k in it tax free. Sweeet.

If you're a professional gambler that is unincorporated you are filing your wins, losses, and expenses on Schedule C just like any other sole proprietor. You pay 15.3% self employment tax on top of your regular income tax.

If you're not a pro your wins and losses net result will be filed on Schedule A. You are only subject to income tax according to your tax bracket on that. No additional self employment tax. You cannot claim losses until you meet your standard deduction under this scenario. You will not pay self employment tax in addition to income tax under this scenario.

The IRS gets real squirrelly once an individual starts claiming professional and deducting expenses. Especially in a case such as Singer's claim. I have seen the few people that tried what he was claiming he did for ten years denied professional status. A person would only even want to attempt it if they were already maxing out social security anyhow. But most likely in that scenario they would fail to meet IRS qualifications.

Slight correction---wins go on 1040 as other income. The deduction for losses is on Schedule A. The Schedule A deduction is limited to the win shown as other income.

Thanks, yes that is correct. Unfortunately I have to file Schedule C and I don't have any reason to itemize deductions anymore at this time so it has been about 7 years since I've had to. Regardless the point regarding Singer's story doesn't make sense and the IRS would not allow what he described to continue much more than a few years. Besides who the hell would want it to when you have to fork over an extra 15%.

Gamblers maintain logs. They can pretty much log whatever they want. The whole US system of taxation related to gambling is a joke. No other country handles it the way we do. But it does allow for the free play train to steam along. If we were like other countries the government would be getting the bulk of money that fuels the free play train.