Please, try to understand this.Whoson1st said:
IF YOU KEEP A DETAILED DIARY, YOU HAVE NOTHING TO WORRY ABOUT.
YOU COULD LITTERALLY HAVE $1,000,000 in bank deposits over the course of a year........in-out-in-out-in-out-in-out-in-out-in-out-in-out.....etc., etc.
Obviously this is not going to happen(i hope) but only a couple times a year, but even if it did using the above exaggerated example............keeping a detailed diary of your wins and losses you will have PROFF of what you netted as a gambler and thus what to report on your taxes.
Also, I have recommend to you a very good gambling tax book in the other tax thread........I suggest you invest the $12.95 and purchase it.
Yes, chances are it will increase your tax burden. Firstly, if you normally take the standard deduction, you can't take it now because you have to itemize. So if the sum of your other itemizable deductions (mortgage interest, state/local tax, charity, medical expenses, etc.) is less than the standard deduction, your burden will go up the difference times your marginal tax rate.steeser said:
Also, your winnings become part of your Adjusted Gross Income. The Personal Expemption (for dependants including yourself) is phased out after you reach AGI of about 140,000. So if you winnings are enough (even if you had a net loss), you can no longer take the expemptions. Tax credits (Education Credits, Child Tax Credits, Adoption Credit, etc.) and IRA's also get phased out as AGi grows. So you may be disallowed from taking advantage of such credits and your tax burden will increase.
It sucks and it is not fair, but it is the way it is required according to IRS code.
