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Tax question (No, not cheating)

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  1. Tarvin Tarvin is offline

    Warrenton, VA
    United States

    Posts: 542
    Joined: Aug 07

    Mar 29th, 2010 (3/29/2010 10:26am)

    So I'm using TurboTax (good idea/bad idea) to do my taxes and I think (hope) I'm doing it wrong.

    Under the miscellaneous income section, I can report all income earned from hobbies plus all hobby expenses and TurboTax shows up with a little box for taxes owed. However, if I just punch in my net earnings with 0 expenses, I get a $900 swing in my favor.

    My question is, if my net income isn't changing, why is my tax liability swinging so wildly? Am I inputting the information incorrectly? And yes, I did read the q&a a few times, trying to figure this out. Thanks in advance for the help.
  2. MYBLUEDOG MYBLUEDOG is offline

    Greenville, MS
    United States

    Posts: 1,999
    Joined: May 07

    Mar 29th, 2010 (3/29/2010 10:56am) in reply to Tarvin

    When you claim gaming loses, they are limited by your gaming winnings.

    You are fully taxed if you have a net win on "hobby" gaming activities.

    The bad part is "hobby" gaming loses cannot exceed gaming winnings to offset other income and reduce you net taxable income.

    That's why it sucks if you have a few scores but have lots of loses. If you don't qualify to file itemized deductions; then you end up paying taxes even though you are a net loss player.

    Turbo-tax might be good for simple filing requirements.

    If you need to find a way to reduce you legitimate taxable income; you probably need an experienced income tax consultant that knows how to deal with gaming winnings and losses. You may be qualified for claiming professional gaming but that's to technical to cover in the forums. If you are filing as a professional gamer; most or all of you gaming losses can be offset, but you would have to be getting a substantial portion of you living wage/income from gaming.
  3. Tarvin Tarvin is offline

    Warrenton, VA
    United States

    Posts: 542
    Joined: Aug 07

    Mar 29th, 2010 (3/29/2010 4:13pm) in reply to MYBLUEDOG

    Yeah, I know my deductions cannot exceed my winnings, but that's not really relevant because I'm a winning player (obv brag is obv)

    My question is why are the winnings and losses valued differently? Like if I input that I won 10k and lost 10k and have a net profit of zero but still report everything, my tax refund drops way down like I'm paying taxes on the 10k even though I didn't actually win anything. Am I doing it wrong? Does TurboTax suck?
    Thread Starter
  4. negativeROI negativeROI is offline

    Columbus, OH
    United States

    Posts: 1,125
    Joined: Feb 08

    Mar 29th, 2010 (3/29/2010 4:36pm) in reply to Tarvin

     
    Originally Posted by Tarvin View Post

    Yeah, I know my deductions cannot exceed my winnings, but that's not really relevant because I'm a winning player (obv brag is obv)

    My question is why are the winnings and losses valued differently? Like if I input that I won 10k and lost 10k and have a net profit of zero but still report everything, my tax refund drops way down like I'm paying taxes on the 10k even though I didn't actually win anything. Am I doing it wrong? Does TurboTax suck?

    You are probably doing it wrong. If you hypothetically work a job and make 50,000 a year of wages, and aside from that had 10k in winnings from poker. That would make your AGI (totally different then taxable income) 60k. Once you get to the back page of the 1040 where you net out your itemized deductions (assuming they are at least 10k considering you have 10k in gambling losses) then it is going to knock down your actual taxable income (the figure you actually pay tax on). This is under the assumption you are putting the income in the right place and the losses in the right place. If you are filing as professional (and using a Schedule C), then I could understand because you are gonna get banged with SE Tax. If you aren't filing like that, then you are likely doing something wrong.
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