Professional Gambling income for Schedule C - no place to enter it so that TT treats it as gambling income and taxes at the proper rate

Forum|Forum|1 year ago
December 9, 2024
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I am trying to figure out how to enter the income for my professional gambling activities. I created a distinct business for this activity, and checked the box for "Is professional gambler", but the income is flowing to Schedule 1 as normal business income on line 3, not gambling income on line 8b, so it's being taxed at the progressive rate, not the flat 24% for gambling income.

When entering the income, I don't see a way to specify the type, and I don't have W2-G's for it (online gaming sites).

TurboTax Home & Biz Windows

Anonymous_

Employee

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Anonymous_

Employee

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JJAndreAuthor

That was my first assumption. I assumed that checking the box for Professional Gambling in the company setup would kick anything entered in under that General category to be categorized as Gambling winnings. In fact, I can only find that one checkbox at the beginning of Schedule C asking if the income is related to Professional Gambling.

Entering income where you indicated doesn't show up on line 8b of Schedule 1, which is what I'm assuming has to happen for it to get taxed correctly.

AmeliesUncle

@JJAndre wrote:
the income is flowing to Schedule 1 as normal business income on line 3, not gambling income on line 8b,

so it's being taxed at the progressive rate, not the flat 24% for gambling income.

The program seems correct to me.

Why do you think it should be on line 8b and be taxed at a flat 24%?

JJAndreAuthor

The business income is gambling winnings. It's being filed through a schedule C because it is being pursued as a business (which NC requires to claim losses). As I understand it, that means it should all be taxed at 24% flat rate.

I don't believe that just because it's filed on a schedule C it somehow converts it to regular income. Besides, everything beyond $200k in winnings would be taxed above 24% if it's ordinary income, and as the numbers go up that matters a lot.