Wednesday, November 25, 2009

State Taxes

States including Hawaii, Connecticut, Massachusetts and Ohio now prohibit deductions of gambling losses on state income taxes. These laws could make it difficult for even a winning player to have much money left over.

Fortunately, there's an alternative -- filing as a professional gambler.

Even in these states that bar gambling deductions, it appears that filing as a professional allows you to deduct losses on a Schedule C to the extent of winnings. Check with an accountant to be sure.

Filing as a professional comes with some disadvantages as well because you have to pay self-employment taxes, but that hardship is far less than the burden of paying taxes on gross profits.

Also check out Poker Cats' recent post on online gambling and taxes.

In other news, it looks like the Treasury Department has delayed enforcement of UIGEA regulations for six months, according to PokerNews.

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