Side business

GoIllini

Market Crises= Gray Hair
One of my coworkers owns a few Subway franchises, but it's often difficult to conduct outside work if you work for a regulated entity- everything has to be signed off by Compliance, and things get pretty iffy if you want to do anything on the side that involves the financial markets.
 
I have been self employed for many years and have a couple of different firms active at a time so the newer business feels like a side job until the money gets serious enough to warrant full time attention. The good thing is no one is looking over my back on the recourses allocated between the businesses but I try to be sensible and keep the cash cow producing and not let the calf eat up all my time.
 
I tutor math and physics on the side. I usually do it on the weekend, but sometimes I do it after work, depending on the situation.


I used to play poker, but it's not worth the time anymore. Perhaps if the US legal environment improves I'll start playing again.
 
Most of it is legal, and some of it is taxes.

Poker players are not treated fairly when paying taxes. Some states, like CT, do not allow them to deduct losses. Because of this there are cases of poker players owing more in taxes than they actually won.

Legally, as with taxes, poker players have to deal with federal and state laws. These are outdated, difficult to interpret, and change significantly from state to state and from Attorney General to Attorney General. Many laws were written before the internet was commonplace. Some states outlaw betting on all contests except ones "based on skill" or "where skill predominates", so then you have some AGs claiming that poker is not skill based, and some that don't care. There are various rulings that support poker being skill based, and others that rule oppositely (I bet you can guess my opinion on this).

Other states have no laws regarding poker but have attorney generals that claim it is illegal to play online (CT is another example of this). One or two states outlaw online poker explicitly (Washing State). However, to date no one has ever been prosecuted for playing poker online, in any state, ever.

The US has also lost a World Trade Organization ruling due to its anticompetitive stance on online poker and gambling. The US was forced to either pay reparations to Antigua or change its laws. We chose to to not change our laws and not pay reparations to Antigua. So, now Antigua is legally allowed by international law to violate US copyright for profit, up to the amount of the reparations (I think that's hilarious).

The Unlawful Internet Gambling Enforcement Act will come into full force in December. It basically states that banks are not allowed to transfer money to an entity involved with unlawful internet gambling. However, it does't define what "unlawful internet gambling" is, and leaves it up to the banks to decide.


Right now you can bet on horses, buy lotto tickets, and bet on fantasy sports online at state-run websites. You can also bet on "skill" games at sites like worldwinner (based in Newton Mass.) But, it's much harder to transfer money to poker sites because of scared payment operators and over zealous bank enforcement. Once you get money to an online site, you are not up against the casual American player, instead you are faced with people who figured out all the hoops to jump through. The games are much harder to beat now, so it's not worth the time to me.
 
Not familiar with US tax laws at all, but couldnt you just open a bank account overseas and top up your gambling account from there? Obviously, you couldn't deduct losses either, but you wouldnt have to pay any taxes on your profits in the first place - provided your account is in UK or Ireland, for instances.
 
Of course you can do that. Many people do. But the issue isn't being able to play; that just takes a little effort. The issue is being able to make money. If everyone you are playing against went through the effort of opening an overseas bank account, good luck. That sounds like a poker game I'd rather not play in.

Plus, if have over $10,000 in aggregate in foreign accounts at any time you have to declare it on form TD F 90-22.1 If you willfully do not do this, you are subject to "up to $250,000 and/or up to 5 years in prison for any person "willfully violating" the requirements to file. (31 CFR 5322a penalty)" Laws Governing TD F 90-22.1 Report of Foreign Bank Accounts

There are reports that the audit rate for filing this form top 90%, so happy filing.

Also, you will still owe taxes to the IRS. You would be more likely to get away with not paying, but the prospect of the bank giving you up to Uncle Sam will always be there. Just look at UBS.
 

alain

Older and Wiser
Not familiar with US tax laws at all, but couldnt you just open a bank account overseas and top up your gambling account from there? Obviously, you couldn't deduct losses either, but you wouldnt have to pay any taxes on your profits in the first place - provided your account is in UK or Ireland, for instances.
Eventually you will have to declare these accounts (or the banks will declare then for you) if you have earnings and then pay the taxes. Look what is happening with the swiss banks nowadays.
Right now you can bet on horses, buy lotto tickets, and bet on fantasy sports online at state-run websites.
Most if not all are state or government sponsored. Unless you get the state to sponsor poker, you will be out of luck.
 
In the UK, and EU gambling is tax free, so you wouldn't have to declare any profits there. I dont live in the US (never have), so I was just curious how taxes would apply then. Currently, I live in Australia and gambling profits are tax free over here as well. Hence, I wouldnt get taxed for any gambling profits at all regardless of where they are being made.
 
Most if not all are state or government sponsored. Unless you get the state to sponsor poker, you will be out of luck.
That is definitely one scenario. I think a more likely one is that it becomes regulated, and then a major casino operator steps in. PartyGaming likely has a long term plan to do this. Major US casinos already have online sites that service non-americans. They are just waiting to jump into the US market.
In the UK, and EU gambling is tax free, so you wouldn't have to declare any profits there. I dont live in the US (never have), so I was just curious how taxes would apply then. Currently, I live in Australia and gambling profits are tax free over here as well. Hence, I wouldnt get taxed for any gambling profits at all regardless of where they are being made.
If you are a US citizen living in the US, you owe US taxes no matter what. If you live over seas you generally still owe US taxes, although there are some exceptions.
 
If you are a US citizen living in the US, you owe US taxes no matter what. If you live over seas you generally still owe US taxes, although there are some exceptions.

Holding a US passport is becoming just not worth the while. Now citizens and residents are going to be required to buy medical insurance as well. The US state takes but gives nothing in return.
 
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