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Old 12-28-2008, 03:40 AM
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Estimated tax refunds

I'm new to the forum so I apologize if this is in the incorrect section of the site, but I have a question regarding tax refunds resulting from self-employed estimated taxes. I'm in a fairly unique situation, insofar as I play poker professionally for my primary income. This past year was my first year out of college and therefore my first year filing taxes as an independent. My CPA advised that I file as a self-employed gambler, which has me paying quarterly state, federal, and self-employment taxes. Unfortunately, a lifestyle as a professional poker player comes with significant yearly variance of income. Specifically, my income in 2007 was in the low-mid six figures, which, predictably, had me paying large quarterlies for 2008, but 2008 was itself a much less productive year. I recently moved cities and will therefore likely have to change CPAs. Is there anything that I need to know in regard to getting my proper tax refund or will a standard filing job by my CPA be enough?

Sorry if this was a very simple question, I am new to handling my own taxes and am admittedly a bit worried about somehow having large sums of money slip through the cracks due to being ignorant of the taxation system. Thanks for any advice/help that you can give me.

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Old 01-08-2009, 11:20 PM
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It appears that you have made quarterly estimated tax payments based on your 2007 tax return. Clearly, your CPA was attempting for you to avoid paying the underpayment penalties and interest on your 2008 tax return.

However, it seems from what you have mentioned that your 2008 gambling income is considerably less than what you had estimated. Therefore, you are entitled to a refund of what may be considerable amount of money.

Even if you file a standard tax return, you would still be entitled to your overpayment of the estimated tax payments. There is really nothing extraordinary that you need to do other than file your regular tax return showing your gambling income as earned in 2008 and you claim your estimated tax payments
made for tax year 2008.

Your CPA will then compute your actual tax liability based on your 2008 taxable income and offset this amount against the estimated tax payments, the excess you would then have it refunded to you or applied to 2009 as estimated tax payments.

Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.

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