Tax help please!

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I'm fortunate enough to be able to live independently, "self-employed". I have no intention of trying to get disability or any government monies, but...

I paid taxes last year and did it how I *should* have to do it (but it was apparently wrong I later found out). I play poker and the tax laws for poker players are just ridiculous.

I've been diagnosed with AS, OCD, and depression. So my question, how do I not pay taxes? Instead of *getting* money from the government, can I just not pay into the system?

Or at the very least, I'd like not to have to pay into SS. Let me pay the 15% or whatever, but I don't want to pay into SS.

I'm not one to game the system, but I definitely feel like the system is gaming me, so my hesitations are lessened. Do I have any options here?

There are actually some AS issues at play here. Poker players are required to keep a book with every single session, win/loss, time, place, and receipts for expenses. I can't do that. I tried to start this year, I lasted two weeks.

Because of my continuing profits, I'll be required to file as a professional and then pay into SS. I would get no standard deduction because I have to put gross winnings on front page and then itemize losses (which is sfing stupid). I won't have a legit book, and will be missing most receipts, so if I ever were to get audited I'd overpay.

Sorry for ramble, but my situation is complicated and I wanted to make sure all the tax experts here knew my situation clearly.

My best advice to you is to have your taxes done by an attorney. An attorney has done our (my family's) taxes for years. Attorneys should know all the proper loopholes and stuff to make it work to your advantage. And, they know the law. The attorney that does my family's taxes charges around $100 to do them. But whoever you get, make sure you know how much they charge first.

I'm certainly no expert, NOBODY really is anymore!! !! !! You CAN generally pay like 20%, and avoid the garbage. You can do what a lot of liberals do, and FORGET about the small winnings, that aren't recorded.(I say liberals, because THEY are the ones often asking for higher taxes, so it is hypocritical.) You SHOULD get some receipt for payment. If there is ANY charge for books, materials, entrance, registering, etc.... That IS tax deductible, at least to offset earnings.

As for "being played"? YEP, we ALL are!

TAX
3. A burdensome or excessive demand; a strain.
tr.v. taxed, tax·ing, tax·es
4. To make difficult or excessive demands upon: a boss who taxed everyone's patience.
5. To make a charge against; accuse: He was taxed with failure to appear on the day appointed.

So the government basically ADMITS that they are playing us! Before 1985, I was effectively an expert. They decided to change it like every year for the next five, and they have changed it since.

BTW one of the changes that they made is that you CAN pay tax if you LOSE money!! !! !! !

I'm not an accountant, but learned some stuff from my dad who knows a lot about businesses.

1. Half a million Americans overpay taxes. It's not illegal, just inefficient.

2. A lot of entrepreneurs get an accountant for this reason, which shouldn't cost more than the taxes he saves you.

3. If you don't want to hire an accountant, then you have to be one. It sucks, but you keep all the money.

I did mine this year. There were several complicating factors, including money coming from a completely different country, but I found that if I went line by line and checked all the words I didn't know in all the instruction manuals, I did fine. However, I do keep minute records of everything, which obviously helps.

Not having to do your taxes only happens if you're very low-income, but even then it's recommended because you might get a refund.

My local library has tax help for free. Don't know about yours, but you should check.

I am horrible at taxes and even though I use the EZ, I never get it right. I either haven't taken enough out for the year or I am way off on what my bracket is. . .even writing this I am getting anxious and have forced myself to finish it and actually POST it.

Merle

whew!

I'm planning on seeing a tax attorney, but I'm not sure that's the most efficient source of knowledge. My concern is less about the specifics of filing correctly for poker players (I've done lots of research on it), my concern is that I am unable to keep records. If my mental proclivity prevents me from being able to do so, it would make sense (at least to me) that there would be some sort of alternative to fit my situation. I'll still be paying them thousands of dollars every year.

@ 2ukenkerl - A couple things. I also am against the very idea of an income tax. I see it as unconstitutional. Just because the big international bankers came in and rewrote the rules in 1913 does not change my Constitution. Besides it being unconstitutional, the money I'm paying does not go to build roads, or schools or things of that sort. It just disappears into our national debt. No thank you.

Secondly, even though I consider myself more of a Libertarian, I feel the need to defend against your classification of liberals. It's not that they specifically want taxes to be higher, it's that they want to build the social net, and that does require money, and as a result you get higher taxes. I'm against a lot of social programs (mostly because they are highly inefficient and may actually make things worse). However, while I feel it is fair to criticize liberals for wasting money in this manner, people who classify themselves as economic conservatives are often in support of other ways that we waste money (war, war on drugs, military-industrial, prison-industrial). So basically, the Democrats have it wrong (but so do the Republicans).

Glad I could help! Sort of. (Sort of help, not sort of glad).

If you are winning this money in casinos or tournaments, you should be receiving a Form W-2G. That, plus the receipts you receive for expenses, should help you during tax time if you can't keep records. If you won the money in private, less legitimate poker games, you probably want to avoid the government altogether.

I do agree that you probably should seek help. You could go to Jackson Hewitt or H&R Block. Or seek out a CPA.

Last edited by michillimackinac on 27 Mar 2009, 6:52 pm, edited 2 times in total.

I play online and live, no backroom type games. In a typical online session I'm playing on 3-5 different sites, and running 20-40 tournaments with 10-16 tables running at a time during the peak. That is not impossible to keep records for, but it tends to go against my nature (I do not like structure). Live is much more difficult, I play locally and fly down to Vegas once or twice a year. Getting receipts is something I will forget no matter how hard I try and remember (I just don't care, can't make myself care, so it's not on my radar). If I do get receipts, I'll either lose them in transit or put them somewhere and forget about them. So, it's actually a pretty difficult situation for me.

Also, the W-2Gs have typically been only for $5k+ scores from my experience.

Then I would highly recommend seeing a tax professional.

So wait, are you trying to tell me there AREN'T a large group of tax professionals frequenting this forum waiting for people like me to ask such questions?

I was actually hoping someone could come and say "I got so-and-so tax exemption due to AS and here is how I did it." Shot in the dark I suppose, but you can't let the dream die.

Well, I could tell you about the AS tax credit, but then I'd have to kill you.

I used to work as a tax preparer, so those are my credentials. Sorry, but, as far as I know, the IRS won't let you out of paying taxes or filing the proper paperwork just because you have AS. That's why I suggested getting professional help to help you figure out what to do.

Well ...

There is no good way around the rules.

But record keeping ... very few people keep records at the level the IRS would idealy like, and if you ever find yourself in tax court they will have the power to basically estimate based on the evidence.

The tricky thing here is that deductions, or losses, are subject to a much higher standard of proof than income is; the ability to deduct these things is considered to be something like a "gift."

I will suggest a couple of things:

First, a bank account that is used ONLY for your gambling activities. Your winnings, and your buy in's. Keep a careful record when you take your profits out once a month or so, or set up a bank transfer to a specific account that will show clearly on the bank statements.

If you can manage it, have someone track your activities on select, random days during the year. Pay someone basically to sit with you and make the records. These sample paper records will help back up the overall record created by the bank account activity.

As for business expenses, such as travel, I'm actually not sure how that works for gamblers (I don't have any as clients), but I would recommend a separate credit card that is used ONLY for business travel and the like. The credit card company, then, essentially keeps the records for you.

While it can be troublesome remembering to use the right cards, it is easier than trying to write every little thing down.

Do you think any of the above could work for you?

I am a CPA but since this is a message board and not an official engagement I totally disclaim all of the above from being professional advice so don't you or the IRS come looking for me if I've made any mistakes above or left anything out.

Oh, I guess there is a corps of tax specialists waiting to help.

Thanks DW_a_mom, that is good advice. I knew I was going to get with a tax attorney soon, but I was hoping there was something I hadn't heard of yet.

I don't think I'd have an issue with the set-up if I could just net profit on the front. I mean, yah, I just won $x, but I paid $y to get in. At the end of the day, it's my net that is actually my "income". As for keeping book, I think some of your suggests are quite applicable and will look into them.

Thanks again.