Summer Tax Series Part 3: Connect With Your Tax Professional
The summer offers both taxpayers and tax professionals an opportunity to revisit their tax situation. As part of the ongoing series, I will highlight steps to take throughout the summer to best prepare for the second half of the year.
If you are working with a tax professional, the summer is a good time to connect for mid-year tax planning. Most tax professionals experience a lull in the summer, which allows for more time to address individual planning opportunities. Not all tax professionals are proactive, so it is a good idea to set a time to speak with them to discuss:
Estimated Tax Payments - You may have received an estimated tax payment schedule when filing your 2023 tax return. However, gamblers often experience variance in their yearly income. If your year-to-date income has deviated from the estimated income early in the year, you can use this time to discuss your current and projected income figures and how it impacts your estimated tax payment obligation.
Mid-Year Planning - If you do not have your year-to-date net income readily available, setting a meeting with your tax professional will give you a reason to address your current standing. Not only will this help with your estimated tax payments, but it can provide better insight into your total projected tax liability for the year. This will allow you to better represent your financial position and help with general bankroll management.
Tax Updates - While tax laws themselves don’t change too frequently, there are often new interpretations, current events and updated guidance that may affect tax positions. This summer alone, there have been two developments that affect nonresident gamblers in the U.S.:
As reported by Kevin Mathers, the WSOP is now able to aid in the ITIN application process for those individuals that reside in tax treaty countries. This will now allow residents of tax treaty countries to avoid the mandatory 30% withholding for those individuals without an ITIN.
The U.S. has suspended its recognition of its tax treaty with Russia. Beginning in August 2024, a Russian resident will be subject to 30% withholding on gambling winnings. This withholding will occur even if the Russian resident has an ITIN
Upcoming Changes to Tax Guidance - As covered in a previous post, the Tax Cuts and Jobs Act of 2017 (TCJA) is set to expire at the end of 2025. It is never too early to be aware of potential upcoming changes to the tax code. If the TCJA expires, there are a number of issues that will directly impact recreational and professional gamblers.