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Beware Crypto-Traders: 1099 Forms May Bury You

September 20, 2023 by admin

Crypto-Tuesday, September 19, 2022 – Hey taxpayers, If you’re messing around with this Bitcoin and other digital money, you better brace yourselves. The government wants their cut too, and they’re real serious about it.

So here’s the thing: end of the year comes, and WHAM! You get hit with a ton of these 1099-B tax papers (soon to be 1099-DAs) What’s a 1099-B? Well, it’s a paper that says how much you made or lost trading stuff. And guess what? Every place you traded crypto is gonna send you one. So if you’re trading a lot, or using different apps to do it, you’re gonna have a mountain of papers to deal with. I have clients who received 100’s of 1099-B forms in one year!

Don’t think you can get just any brainiac with a calculator to figure this out. This crypto tax stuff is like the Wild West, and you need someone who knows the ropes. So get someone who really gets how digital money taxes work.

And here’s the kicker: some of these trading places don’t even send out 1099-Bs. So you gotta be real careful, or you’re looking for trouble with the IRS. My old man used to say, “Time is money.” So use your time wisely and get to know how taxes work with this crypto stuff.

Hey, I know it sounds like a headache, but life ain’t always easy, right? This is part of the game if you wanna get rich and keep your money safe. Just remember, the taxman always wants his share, so you better be ready. It’s not just about making a quick buck; you gotta be smart about keeping it too.


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Today's Tax Talk Tagged With: 1099-B, Bitcoin, Crypto, Ethereum, IRS, Tax Return, Taxes

Gambling With The IRS

March 7, 2023 by admin

Monday March 6, 2023 – The Sixteenth Amendment to the Constitution provides Congress with the “power to lay and collect taxes on incomes, from whatever source derived.” Gambling can be a fun and exciting activity. Remember, the Internal Revenue Service (IRS) recognizes winnings from casinos, lotteries, horse racing, sports betting and other gambling activities as income and subject to taxes. Gambling losses may be deductible on your federal tax return, but only up to the amount of winnings.

To claim any deductions for your gambling losses, though, it’s important to keep contemporaneous records of all your gambling activity throughout the year. Whether it’s a casino or sportsbook ticket stub, an online receipt or bank statement with the transaction listed, having documentation of your losses is essential.

Depending on where you live, additional state taxes may also apply to your gambling winnings. Some states require that you pay taxes on all your gaming revenue (not just the amount over a certain threshold), while others might not have any rules in place at all. In Illinois, where I live, the State taxes all winnings, and does not allow deductions for losses.

I have had at least one client with larges winnings – hundreds of thousands of dollars. But larger losses. The State of Illinois taxed the full amount of winnings. In this case, that meant a very large State Tax bill.

Professional gamblers (not an easy designation) may be subject to additional tax requirements. Professional gamblers are considered self-employed and must pay self-employment taxes on their winnings. They may also be required to pay estimated taxes throughout the year.

So, if you don’t keep good records and you get audited, it’s a gamble. Good Luck.

Attorney Steven A. Leahy discusses IRS taxes on Gambling on Today’s Tax Talk.

https://www.law.cornell.edu/constitution/amendmentxvi

https://www.capjournal.com/arena/finance/las-vegas-casinos-gamblers-may-get-a-surprise-irs-jackpot/article_4a468745-4db3-512a-b5d3-04568f0b8c04.html

https://ktla.com/news/nexstar-media-wire/as-march-madness-looms-so-do-sports-betting-taxes/

https://www.irs.gov/taxtopics/tc419


Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Filed Under: Today's Tax Talk Tagged With: Gambling, IRS, Taxes

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