Originally Posted by
accountinquestion
Originally Posted by
MaxPen
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.
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