Monday, June 16, 2008

Book Review: "How to Turn Your Poker Playing Into a Business" by Ann-Margaret Johnston

Finally, the book review I promised. I think I have a good one in me now, so here goes:

When many people start reading book reviews, they may just skim the first paragraph and decide if they want to continue reading the review based on if they think the book applies to them or not. So let me hurry up and mention right away that I recommend this book to EVERY POKER PLAYER who files a tax return in the US. Whether you play once a year or 10 hours a day, this book has tax tips and info that I think is definitely useful to any poker player. You don't necessarily have to make poker your business for this book to be useful. So everyone read on.

This 122-page book from 2005 might at first seem like it could be too short and outdated to be any good. That couldn't be further from the truth. All the info packed in this little book is very useful, quite functional, and it should remain that way for a long time. The author is a poker-playing CPA who knows her stuff and has made this book poker-specific. She gives insight and helpful tips regarding tracking play and claiming items in a way that every poker player needs to know about. It really opened my eyes to what I was doing with my tracking and I learned many things regarding poker and taxes that I had no clue about.

The author describes the detail needed in tracking poker play and what can be claimed and what cannot. She also helps the reader decide whether he wants to claim as a "professional" or as a "hobbyist" and the differences in each one. One issue I found interesting is the type of detail a poker player should keep of his play in order to be taken seriously by the IRS. It boils down to keeping a record of poker play in sensible intervals. Not per hand or such but maybe per table session during live play but maybe less often during online play. It's somewhat of a gray area, but one that a player must get right if he wants to avoid an audit by the IRS. I have gone back to recording my online play per day and have separated my winning days from my losing days. That brings up another interesting fact that I read in this book. You can only claim losses up to the amount of your wins. So if you win $800 but lose $1000, you can only claim $800 in losses to match your $800 in winnings. And you can't make the total zero since the losses and winnings match up. You must claim winnings and losses separately. That is why tracking play a little more often than usual comes into play.

Some other interesting things in the book are the fact that other expenses like the cost of travel, your computer, and your Internet service can only be claimed if you are claiming to play poker for a living AKA you are a "professional". If you are only a "hobbyist", you must still claim your winnings and losses but can't claim other expenses. Plus there are certain interesting characteristics to your poker playing that you must have in order to be considered professional.

So as you can see, this book applies to all US poker players. After reading this book, I'm so excited about the advantages I will have when I file my next tax return. Since I rely on updated tax software to help me figure my tax return, I have full confidence that I can file an accurate return and everyone who reads this book should gain that same confidence, also.