Archive for the ‘Rhode Island’ Category

Rhode Island Is Now a Bad State for Gamblers

Thursday, August 8th, 2013

Rhode Island Seal

Little Rhody, Rhode Island, changed its tax structure for 2012. Rhode Island eliminated itemized deductions (but did increase the standard deduction). Thus, an amateur gambler with $50,000 of gambling winnings and $30,000 of gambling losses will owe tax on his wins and will not get the benefit of his gambling losses.

Here is the list of bad states for gamblers with the reasons why:

Connecticut [1]
Hawaii [2]
Illinois [1]
Indiana [1]
Kansas [8]
Massachusetts [1]
Michigan [1]
Minnesota [3]
Mississippi [4]
New York [5]
Ohio [1] [6]
Rhode Island [1]
Washington [7]
West Virginia [1]
Wisconsin [1]

NOTES:

1. CT, IL, IN, MA, MI, OH, RI, WV, and WI do not allow gambling losses as an itemized deduction. These states’ income taxes are written so that taxpayers pay based (generally) on their federal Adjusted Gross Income (AGI). AGI includes gambling winnings but does not include gambling losses. Thus, a taxpayer who has (say) $100,000 of gambling winnings and $100,000 of gambling losses will owe state income tax on the phantom gambling winnings. (Michigan does exempt the first $300 of gambling winnings from state income tax.)

2. Hawaii has an excise tax (the General Excise and Use Tax) that’s thought of as a sales tax. It is, but it is also a tax on various professions. A professional gambler is subject to this 4% tax (an amateur gambler is not).

3. Minnesota’s state Alternative Minimum Tax (AMT) negatively impacts amateur gamblers. Because of the design of the Minnesota AMT, amateur gamblers with significant losses effectively cannot deduct those losses.

4. Mississippi only allows Mississippi gambling losses as an itemized deduction.

5. New York has a limitation on itemized deductions. If your AGI is over $500,000, you lose 50% of your itemized deductions (including gambling losses). You begin to lose itemized deductions at an AGI of $100,000.

6. Ohio currently does not allow gambling losses as an itemized deduction. Because of the rescinding of the law allowing gambling losses as a deduction, Ohioans cannot deduct gambling losses on their state, city, or school district returns.

7. Washington state has no state income tax. However, the state does have a Business & Occupations Tax (B&O Tax). The B&O Tax has not been applied toward professional gamblers, but my reading of the law says that it could be at any time.

8. Beginning in 2014 (2014 tax returns filed in 2015), Kansas will not allow gambling losses as an itemized deduction. See #1 above as to how this will impact amateur gamblers in the Sunflower State.

My thanks to Paul Dion, CPA, for pointing this out. My one Rhode Island client moved elsewhere before 2012 so I haven’t prepared a Rhode Island return this year.

Well, He Probably Wouldn’t Have Won Reelection

Sunday, September 16th, 2012

John McCauley, Jr. is the Deputy Speaker of the Rhode Island House. He’s not running for reelection. Given that he will be pleading guilty to one count of tax fraud and one count of conspiracy, that’s likely a good decision.

Mr. McCauley and his partner in an insurance adjustor business, William L’Europa, were accused of underreporting $1.8 million in their business. That equates to a tax loss of over $500,000 to the IRS. Mr. L’Europa will also be pleading guilty to the same charges.

Mr. McCauley is the sixth Rhode Island legislator to face criminal charges during 2012. It hasn’t been a good year in Providence.

Today Is the Day to Prepare (Hurricane Irene)

Thursday, August 25th, 2011

If you are a resident of New Jersey, New York City/Westchester County/Long Island, Connecticut, Rhode Island, or Massachusetts, you need to drop what you’re doing and get prepared for Hurricane Irene. Now.

Maybe we’ll get lucky and Hurricane Irene will veer out to sea. However, the current forecast track map puts Irene directly over the New York metropolitan area on Sunday. Unfortunately, there is no reason to think that Irene will veer away; the recent forecast maps have moved Irene toward the west rather than the east.

Hurricanes don’t strike New York City often, and I suspect residents of the Big Apple think this might be just another storm. The effects, though, of a direct hurricane strike might be truly horrifying: Flooding the subway system for weeks to months, devastation along the Long Island shore, flooding in lower Manhattan, millions without power, etc.

If you reside in a low-lying flood-prone area in the Northeast threatened by Irene, consider taking action today. The moment that government authorities announce possible evacuations, people will panic. Buy your supplies now. The National Hurricane Center has links to preparedness guides.

Again, I am hopeful I’ll be looked at in a week as a fear-monger. I just remember the last time I saw such a map, and the disaster that occurred (Katrina). I also remember a saying from my mother: Better safe than sorry.

Edit:
Some Resources:
National Hurricane Center (Irene Home Page)
Dr. Jeff Masters’ Blog
Ryan Maue’s Twitter Feed
Brendan Loy’s Blog

And, most importantly, your local office of emergency preparedness.

Hopefully, my writing this post is much ado about nothing. I just don’t like what I’m seeing on the maps.

Rhode Island is the 18th

Tuesday, July 8th, 2008

Rhode Island has joined 17 other states including California to mandate that state tax returns prepared by professionals be electronically filed. The mandate goes into effect in January.

Under Rhode Island’s new law individual taxpayers can opt-out of e-filing. Additionally, the mandate only applies to preparers who submitted 100 or more returns to Rhode Island. And returns that aren’t eligible for electronic filing (generally, certain complex returns) aren’t covered by the new law.

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