Taxing Issues for Gamblers
I just got a nice letter from the IRS saying no, I didn’t really owe the $6,122 that on Feb. 24 they had said I did after they looked at my 2018 return. Thank you, IRS, for the early Christmas present!
For once, this was not a gambling issue about which I had to “educate” them, as I have had to do so many years in the past. This time I had to explain to them their own rules about taking money out of a 529 for granddaughter Kaitlynn’s last year in her master’s program. But I used my experience as a teacher of high school slow learners, wrote a simple but not aggressive letter — using no big words — to explain why their own tax codes did not support their position. It took almost 9 months, but some human finally read my letter and decided that I was right. Another victory in my column!
But this got me thinking that tax season will be coming up before we know it, and we will have to deal with it in spite of election turmoil and a pandemic taking much of our brain space. 2020 will be a strange year for Brad and me taxwise, the first time in 30+ years that we won’t be working with gambling figures. But many of you will have to deal with them, and I want to steer you to some resources that might help you with possible thorny tax problems.
Russell Fox, a super knowledgeable tax preparer I highly recommend and a major contributor to the last edition of my Tax Help for Gamblers, writes a very useful blog for gamblers, “Taxable Talk,” tackling the perplexing issues you might face when dealing with the IRS. Recently he discussed in detail the new IRS memorandum dealing with the question of whether Daily Fantasy Sports is gambling, a subject that had been a gray area and subject to personal and profession interpretation since its inception.
Also, I recommend a helpful article by Russ called “GAMBLING AND TAX GOTCHAS.” This is an extremely good review of possible tax trouble spots for any gambler, some of which you might not be aware since they are new for 2020. You also might find it helpful to go to Russell’s home page and start browsing – he has great information and money-saving tax advice not just for your gambling issues but for all parts of your financial life. And you might like to check out the recent “Gambling with an Edge” podcast, where Russ answers many questions that listeners have asked.