I guess I'll just wait to see what Jackson Hewlett says when I have my taxes done.
I'm kinda thinking and this could be 100% wrong that Virginia (my state) is "friendly". I'm basing this on the fact that it's not one of the states where YouBet.com is banned. There are about 7 or 8 states which don't allow betting on horse on the internet. (North Carolina and Nevada being two that come to mind). There are several more.
Just going to sweat it out until I get it done in Feb. or March
I'm kinda thinking and this could be 100% wrong that Virginia (my state) is "friendly". I'm basing this on the fact that it's not one of the states where YouBet.com is banned. There are about 7 or 8 states which don't allow betting on horse on the internet. (North Carolina and Nevada being two that come to mind). There are several more.
Just going to sweat it out until I get it done in Feb. or March
No, of course I'm no professional gambler!!
But because I had money deposited to my checking account from Neteller, I'm going to have to claim the "winnings". Then I will itemize my deductions for the losses which were more. But that's not the point. Assumming we are not breaking any Fed. law by playing period, there has been a lot of discussion that we are breaking the "state law". Anything on my Federal return is seen when state taxes are done.
But because I had money deposited to my checking account from Neteller, I'm going to have to claim the "winnings". Then I will itemize my deductions for the losses which were more. But that's not the point. Assumming we are not breaking any Fed. law by playing period, there has been a lot of discussion that we are breaking the "state law". Anything on my Federal return is seen when state taxes are done.
OMT you are always the biggest worrywort around!
Really though, if you report anything gambling related it doesn't mean you broke the law and state governments aren't allowed to base a prosecution on it. After all, lots of Virginians regularly patronize Charles Town and Atlantic City, not to mention flying out to Vegas on occasion.
Not to mention there is this little thing called the Constitution which has this 5th Amendment, the right to not be forced to self-incriminate yourself. For this reason, tax documents have a special status being that while legal documents, their scope is generally required to follow due process which means they have to be used exclusively for tax purposes. Scary thing though is how John Ass-croft wants to make it so anything you ever did or said could be tied to terrorism, and since every crime known to man could be tied to terrorism in his perverted mind caution should be preached. In any event just remember that gambling by people of Utah or Hawaii, the lone states without gambling, isn't illegal, just doing it inside those states is.
Really though, if you report anything gambling related it doesn't mean you broke the law and state governments aren't allowed to base a prosecution on it. After all, lots of Virginians regularly patronize Charles Town and Atlantic City, not to mention flying out to Vegas on occasion.
Not to mention there is this little thing called the Constitution which has this 5th Amendment, the right to not be forced to self-incriminate yourself. For this reason, tax documents have a special status being that while legal documents, their scope is generally required to follow due process which means they have to be used exclusively for tax purposes. Scary thing though is how John Ass-croft wants to make it so anything you ever did or said could be tied to terrorism, and since every crime known to man could be tied to terrorism in his perverted mind caution should be preached. In any event just remember that gambling by people of Utah or Hawaii, the lone states without gambling, isn't illegal, just doing it inside those states is.
OMT,
I have a few words for you
Seriously they don't matter. Tax law is its own separate world. You could get prosecuted by your state or the IRS itself for not reporting income, but likely you just face a fine unless you are grossly overdoing it. If you are an overall loser and you aren't reporting then there is no recovery for the tax authorities and they might just slap your wrist with some fine for improper reporting. Still the tax and legal code are separate worlds and in most cases aren't really allowed to talk back and forth. Unless you really believe the state of Virginia is about to do something they never do, prosecute people for being gamblers, they I would suggest you start sleeping better. Sure there may be some laws written against it, but please out of the millions who gamble illegally each year in the country, write me a list of those that actually got prosecuted for it. Quite simply all prosecutions are against the bookies, the bettors are RARELY and I do mean rarely (as in maybe a handful of cases nationwide a year at most) get even noted. Ask anyone who has bet with a bookie, your biggest risk in doing so is he gets busted and can't pay you.
I have a few words for you
Seriously they don't matter. Tax law is its own separate world. You could get prosecuted by your state or the IRS itself for not reporting income, but likely you just face a fine unless you are grossly overdoing it. If you are an overall loser and you aren't reporting then there is no recovery for the tax authorities and they might just slap your wrist with some fine for improper reporting. Still the tax and legal code are separate worlds and in most cases aren't really allowed to talk back and forth. Unless you really believe the state of Virginia is about to do something they never do, prosecute people for being gamblers, they I would suggest you start sleeping better. Sure there may be some laws written against it, but please out of the millions who gamble illegally each year in the country, write me a list of those that actually got prosecuted for it. Quite simply all prosecutions are against the bookies, the bettors are RARELY and I do mean rarely (as in maybe a handful of cases nationwide a year at most) get even noted. Ask anyone who has bet with a bookie, your biggest risk in doing so is he gets busted and can't pay you.
Not to compound your fears or anything OMT, but there is a worrisome scenario here. You report your gross winnings with an offsetting deduction for your losses. So your return shows a wash. But you have the burden of establishing your losses in fact occurred to sustain the deduction. If challenged, and if you have no detailed records/betting slips, etc. to support the losses, your deduction could be disallowed. But they might "take your word" for the winnings leaving you with a serious tax liability. Suppose you made an average of just 2 $110 to win $100 bets per day. That's 730/year. If you won exactly half your games, your winnings would be $36,500. Your losses would be $40,150, but you could only deduct $36,500 since losses can only be deducted to offset winnings. But, if your losses were not deductible b/c you couldn't adequately document them, then you'd owe tax on $36,500. Penalties and interest could apply and in the nightmare scenario failure to pay estimated taxes might lead to additional penalties!!
This would seem to be an extremely harsh result, and you would think that if they accept your figure for winnings that they would accept your figure for losses, but at any given time there are "hot button" issues for the taxing authorities that they focus on. I have no idea if deduction of gambling losses is one of them, but going forward you might think of a better record keeping system.
This would seem to be an extremely harsh result, and you would think that if they accept your figure for winnings that they would accept your figure for losses, but at any given time there are "hot button" issues for the taxing authorities that they focus on. I have no idea if deduction of gambling losses is one of them, but going forward you might think of a better record keeping system.
The standard procedure is to keep a diary and the IRS will never fight you on it. Include the date and the team you bet on and the amount bet. Then the result in a nice ledger, wins in one column, losses in another and you have zero to worry about. They can't claim they will only accept the wins and losses when you do that, not to mention tax courts have upheld this method as being sufficient.
OMT, the definition of "winning" is each bet you win counts as a win; each bet you lose counts as a loss. So if you win 10 bets winning 100 each, your income to report would be 1,000. You are then permitted to deduct your losses (but the losses cannot be deducted in excess of your winnings), so suppose you lost 9 bets of 110, then your losses are 990. Your net result is 10 income, but you can't just report $10 as "gambling income". You have to report the income as 1,000. Then you report -990 as an itemized deduction (yes you have to itemize your deductions in order to claim it).
It makes no difference when (or even if) you collect your winnings. You are required to report all your bets for the entire year and then get to deduct the losing bets.
It is not possible to simply say that you collected 400 from neteller so your "winnings" are 400.
So, people who are betting a large number of games throughout the year are going to have a staggering amount of "income" even though they may well have a staggering amount of "losses" to deduct.
It makes no difference when (or even if) you collect your winnings. You are required to report all your bets for the entire year and then get to deduct the losing bets.
It is not possible to simply say that you collected 400 from neteller so your "winnings" are 400.
So, people who are betting a large number of games throughout the year are going to have a staggering amount of "income" even though they may well have a staggering amount of "losses" to deduct.
OMT, I have read in many places, notably the tax column in Card Player that says a simple diary much like what I described is quite sufficient and the agents won't argue with it. After all if you went to a casino and played sports, there is no way a casino could create a record of your play.
