Originally Posted by regnis View Post
Originally Posted by MaxPen View Post
Originally Posted by accountinquestion View Post

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.