Friday, December 26, 2008

Home for the Holidays

As I write this I am 40 minutes outside of Washington DC at 35,000 feet. Once I land I’ll be hanging out in the airport for about 90 minutes, then on a quick flight to Pittsburgh, where I’ll be spending the holidays with my family (read: Mom and Dad). So for the next 6 days I won’t be playing a single hour of poker. This saddens me greatly, but such is life.

Fortunately for all of you I’ve saved up some good stories to write about during the break. Hopefully I’ll have time to post a few of them so everyone can have something interesting to read during the holidays. If not, for once I’ll apologize in advance of being lazy…

I just finished a second reading of How to Turn Your Poker Playing into a Business by Ann-Margaret Johnson. For anybody aspiring to turn this game into more than a hobby (or simply to avoid getting in trouble with Uncle Sam), I strongly suggest this book. It’s written in language anybody can understand, provides examples, and can be finished in a 2 hour flight. The book goes through a lot of topics, the first of which is how you can determine if you’re a “professional” or merely a “hobbyist”. The primary distinction appears to be “Do you do anything else?”. In my case the answer is most definitively no, which seems to qualify me to file as a professional in the calendar year 2009. As such, I have generated a check/list of stuff that needs to happen in the next few weeks to make sure I get off the ground on the right foot:

1. Find out if I can deduct meals? Sounds like no.

2. Open separate banking account with Etrade.

3. Write business plan.

4. Get/convert a credit card for business use.

5. Transfer health insurance to said credit card.

6. Transfer cell phone bill to said credit card.

7. Create milage log. Use "mileage method" for any trips.

8. Open SEP IRA

I’ve actually already written the business plan (it’s only a page long), the purpose of which is to fight back in case I somehow manage to get audited. Most of the other points deal with the advantages of filing as a pro, namely the ability to write off expenses, effectively paying for them with income before it gets taxed (this in turn lowers your Adjusted Gross Income, which is directly correlated to how much you owe the IRS on April 15th…which coincidentally happens to be my birthday).

I have two or three more days to play this year, and I’m going to generate a poker income somewhere in the region of $50,000. By reporting this income to the IRS, I’m basically being a “good citizen” and writing a five-figure check to bail out Detroit (those rat bastards…don’t even get me started). Why am I doing this, you ask? Well, a number of reasons. First of all, it is the right thing to do. Cheating on your taxes is wrong, even if you don’t get caught. If you do, you’re royally fucked and in for an extra dose up Uncle Sam all up in your business every year for the rest of your natural life. I don’t want that. Second of all, Danielle pretty much demands I do it this way. That my sound harsh, but to be blunt there is really only one person in this world who can tell me what to do at this point, and it’s her. She’s looking out for my long term best interests and playing the much needed role of “conscience” in this stage drama, and for that I’m greatly appreciative. Finally, at some point in the near future I’m probably going to be applying for a mortage. If I want any hope of being accepted, I need to show this income on my tax return. The “Hey I want a loan for $500,000 but oh by the way my income last year was less than a twentieth of that” really isn’t going to fly.

As a final note, this Christmas I am going to explain all of this to my parents. They are probably going to go batshit, but as per the previous paragraph there really isn’t anything they can do about it. They haven’t written a tuition check since my 6th semester (of 10), which was in the Spring of 2003, practically (gulp) 6 years ago. Has it really been that long? Hayah!!!

4 comments:

Steve said...

I can't believe you're coming to the east coast and not even visiting me ...

jesse8888 said...

Dude, I haven't called a single friend from high school. And they all still live here. Also, my cell phone charger didn't leave my apartment because I'm retarded. Finally, last I checked Philly is 300 miles from Pittsburgh. And in closing, I'm retarded.

TiocfaidhArLa said...

Smart move on the tax front. Details are hazy, but I remember a documentary about cleaning crime money in the middle of last century. There were two ethnic groups and both headed toward Vegas. One paid taxes, the other didn't. One lot are now in jail. When you're on a winner, keep life simple. Nice apprentice salary for 1st year! All the best for '09!

Dave said...

You should have bought a house a year ago if you wanted to say "Hey I want a loan for $500,000 but oh by the way my income last year was less than a twentieth of that." No problem! Hell, if you have an income at all, we'll loan you a couple million!

I'm glad Danielle has a conscience. One of you has to.

I'll be very curious what your folks say. Make sure to blog about that conversation.