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Thread: AP Taxes

  1. #1
    Random number herder Norm's Avatar
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    AP Taxes

    The tax law changes for 2018 included a 20% deduction for pass-through businesses. Pass-throughs include sole-proprietorships, partnerships, S corps, LLCs and LLPs. Basically, if you pay business taxes on your personal income tax forms, you are a pass-through. But, not all pass-throughs are qualified for this deduction. Problem is, what is a qualified pass-through business? The rules were not solidified until last month, in a 248 page, unreadable memorandum.

    So, is AP income qualified for this deduction? Congress excluded a bunch of business types (health, law, accounting, brokerage, performing artists, athletics, and consulting). Congress also excluded any business where the principal asset is the reputation or skill of its owners, which would seem to have excluded APs. BUT, Treasury effectively overrode that exclusion. Treasury instead barred from taking the deduction only those businesses that earn endorsement, licensing, or appearance fees based on their owners’ reputation or skill. This will make it possible for many pass-through owners to claim the deduction (for example, professional gamblers), if Congress did not explicitly exclude their businesses. Or, so says the article linked below.

    You’ll need to see a CPA to see if this applies to you.

    https://www.taxpolicycenter.org/taxv...ugh-businesses
    Last edited by Norm; 02-20-2019 at 07:58 AM.
    "I don't think outside the box; I think of what I can do with the box." - Henri Matisse

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    I believe "Big Daddy" gave a good answer to this when I asked about it a couple months ago. Most of us will be under the income limits of $157,500 single and $315,000 married so you can use the simplified calculation worksheet. IRS thru in a few last minute items like you have to deduct the self employment deduction from you income.

    I wish "Big Daddy" would add his latest 2 cents.

  3. #3
    Random number herder Norm's Avatar
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    Yeah, looks like you deduct self-employed tax and self-employed health insurance.
    "I don't think outside the box; I think of what I can do with the box." - Henri Matisse

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    NOrm, in y0ur title, does AP mean Advantage Player or Advanced Placement (or both)?

  5. #5
    Random number herder Norm's Avatar
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    I tried reading the 248 page memorandum. It's beyond advanced placement. It must take years of training to write in such a confusing manner.
    "I don't think outside the box; I think of what I can do with the box." - Henri Matisse

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    Quote Originally Posted by Norm View Post
    I tried reading the 248 page memorandum. It's beyond advanced placement. It must take years of training to write in such a confusing manner.
    The politicians set out to simplify the tax code this year. They reduced the size of the 1040 form to the size of a post card (well a large post card) and then added six more schedules. Their brains are up their ass. My federal tax return is longer than ever.

  7. #7
    Random number herder Norm's Avatar
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    Got my taxes from my tax guy. Problem is, the 1040 was completely different with extra calc sheets. Hard as Hell to compare with last year's tax forms to try to determine if there are any errors.
    "I don't think outside the box; I think of what I can do with the box." - Henri Matisse

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    Quote Originally Posted by Midwest Player View Post
    The politicians set out to simplify the tax code this year. They reduced the size of the 1040 form to the size of a post card (well a large post card) and then added six more schedules. Their brains are up their ass. My federal tax return is longer than ever.
    This reminds me of something I think about every year at tax time. While an undergrad, I really took a liking to reading tax code and asked my professor about the future of tax accounting. I told him I was thinking of becoming a tax accountant or lawyer. I was afraid the future would not be good for those in the tax field because of all the talk at the time about simplifying the tax code (this was in the late 70's). I distinctly remember him laughing so hard I thought he was faking it. He told me the tax code would NEVER be simplified because there were too many people invested in keeping it the way it was. He then put a qualifier on it by saying that if it did happen, it would not be in my working lifetime. I thought he was just saying that to pull as many students as possible into his courses. I made the same mistake when I thought that card counting would be dead within a short period of years, (I had no idea about other legitimate forms of AP at the time). I don't try to predict the future anymore.

  9. #9
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    Thankfully in Australia a court ruling many years ago held gambling winnings are tax free.

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    It is very easy to write off gambling losses to offset winnings. Even if youre over 6 figs a year, theres just way to many outs for professional gamblers to write off loses. The IRS understands that casinos were built from worldwide every year loses. Like I said, the theres dozens of amount of ways to LEGALLY write off losses

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    Quote Originally Posted by GAS1 View Post
    It is very easy to write off gambling losses to offset winnings. Even if youre over 6 figs a year, theres just way to many outs for professional gamblers to write off loses. The IRS understands that casinos were built from worldwide every year loses. Like I said, the theres dozens of amount of ways to LEGALLY write off losses
    Feel free to add some substance to your post.

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    Quote Originally Posted by GAS1 View Post
    It is very easy to write off gambling losses to offset winnings. Even if youre over 6 figs a year, theres just way to many outs for professional gamblers to write off loses. The IRS understands that casinos were built from worldwide every year loses. Like I said, the theres dozens of amount of ways to LEGALLY write off losses
    Both under the old tax law and the new it has been legal to write off gambling winnings against losses. You just have to itemize or file as a business.

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    Quote Originally Posted by 21forme View Post
    Feel free to add some substance to your post.
    What would you like to know? which losses count and ways to prove them?

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