Taxes and poker
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Taxes and poker
by beezee » Wed Apr 12, 2006 3:51 pm
MJ
Sticky: Taxes and poker
« on: Jan 4th, 2005, 9:59pm »
This seemed to be the topic on the pokercharts thread, so I thought I'd make a new one here that was a bit more visible.
Anyhow, since tax prep season is in swing now, I'm sure a lot of you have questions about poker taxes, Neteller and the like.
First disclaimer is that I am not a CPA or any type of legal counsel, so don't take my word for anything other than opinion and always refer to a licensed CPA or tax lawyer for legitimate advice. So again, I Am Not A Tax Lawyer. That being said..
Q: How do I pay taxes on my poker income?
A: To start off, poker, taxes and the IRS is a pretty bad combination. Under the letter of the law, you are supposed to keep a logbook of every session you play, how much you won each session and how much you lost each session. You also need a way of verifying the data in your logbook. This is reason #529 to have and use Poker Tracker.
So at the end of the year, you tally how much you won over all your sessions, how much you lost, then pay the IRS on your winnings. This is counted as 'Gambling Income' on your 1040 I believe.
Q: Um... crap, what if my book keeping is not quite that great?
A: If, however, you are not by birth a die-hard book keeper like the IRS wants you to be; but you are still interested in reporting your income, the easiest method is to report your net income regarding your cash on hand account. Note that in the event of an audit, this is likely not going to be sufficient for the IRS. (However, paying taxes on this income will likely lead to a situation of not being audited by the IRS to begin with.)
As an example of poker income, if you cash in and cash out from your bank account to Neteller, the total net income in your bank from poker activities is what you should report. Again however, in full legal requirement, the IRS would require that you report all income earned, even if it is sitting in your Party Poker or Neteller account.
Q: Do I HAVE to pay money on my poker income?
A: If you want to follow the law, yes.
Q: Is Party/Empire/Neteller based in the US and do they report my income to the IRS?
A: Party and Empire are technically based off-shore, but generally pay off their players through US banks; meaning that there is a paper trail on your funds when you are paid out. Neteller is technically based off shore as well, but is HQ'ed in Canada. Neteller as a foreign entity, is not required to report to the IRS.
However, Neteller did/does require users to create account with the last four digits of their social security number, so it is possible for them to cross-check and easily come up with your whole social, if need be. While not explicit, Neteller seems to indicate that they would cooperate with the US government concerning any investigation or reporting.
Party Poker and Empire Poker, as international companies, are not required and do not report your winnings or losses to the United States IRS.
Q: Is the Neteller Debit card considered an international debit account?
A: It is issued by a US based bank, so no. All transactions would be under US jurisdiction.
Q: I heard on XXX newsgroup that I could take my Party Poker check to a check-cashing store/branch and the money would be unreported to the IRS. Is this true?
A: Technically, this transaction is probably not being reported to the IRS unless you are cashing checks of over $5,000. Depending on the type of store you take your check to, they can charge anywhere from 3% to 15% of the value of the check and also require personal identification as well. If personal identification is required, there will be a papertrai regarding your personal information.
Q: What are the chances of being audited by the IRS?
A: Not very high, unless your financial activities have triggered a flag in the system or you are the lucky recipient of a random audit. In the event that you are audited and are found to owe money to the IRS, a penalty will be assessed against you, ranging from penalty + interest in cases of oversight/accident, to severe penalty + interest + possible legal action in cases of purposeful tax evasion.
In an IRS audit, the audit also covers your last 3 fiscal tax years. This means that you need to provide documentation for all previous years if required to do so.
Q: Is there any way to make my poker income business related, like if I already own a business or wish to call my poker income self-employment income?
A: Yes and no. Yes, in that it is theoretically possible, but in order to call your poker income part of a business, you need 3 years of verifiable (and taxed) records showing that your primary source of income is through gambling/poker. If you are able to have this type of documentation, then you are able to declare your income as business.
Q: Why would anyone want to declare their poker income as business?
A: In short, write-offs. For example, if you have the itching to 4-table, you could always buy a 19" LCD and write that off as a 1-to-1 business expense. If you want to make your ROI shoot through the roof, you can also have your tournament buy-ins deducted as a business expense as well. Want to take a trip to vegas to play poker? No prob, business expense as well. Computers, office furniture, rent, DSL/phone, med insurance - all of these are to some extent or another deductible if you count your poker income as business. Of course, to meet these requirements, it's just about impossible with what the IRS has going on..
Q: Isn't online gambling still technically illegal? And if I pay taxes on it, am I incriminating myself?
A: In certain states and in a very, very gray federal law, online gambling is considered illegal. To date however, only one (two?) individuals have actually been charged with gambling online. Technically, the IRS is also bounded by laws to not report your source of income (which they won't know if your gambling income is casino or online based unless you are audited). That said, the IRS has a bad reputation of not following these laws and have in the past provided other agencies with tips regarding illegal financial activities - but, this normally involved large scale drug, money laundering and mob activities.
Q: Is there any type of legal way of lowering my poker taxes, through any tricks or loopholes?
A: This would have to be betwene you and your CPA. The only ways to write-off taxes is to operate as a business / sole proprietorship. As stated earlier, if you operated your own 'poker' business, you need proper documentation and proof of gambling as your fixed income. The only other business that revolves around poker are poker affilites, whose income is not considered gambling and thus are required to report as business. Affiliates are paid by most sites in the same method as the site's players.. These people still have to pay quarterly estimated tax and self-employment taxes, but with the benefit of business write-offs (but not tournament write-offs). Again, if you wish to pursue further, talking with your CPA is a your best bet.
Q: What is MJ's person opinion about gambling with the IRS?
A: MJ's view is that gambling with the IRS is like speeding. The faster you go, the more likely you are to get caught and the more you pay. Tickets from the IRS are also about a digit or two more painful as well.
Anyhow, this is all that I could think about off the top of my head. A lot of this is already in the Party Poker faq, but thought to re-type it here. If anyone has questions, I will try to answer them as best as I can.
Again, if you want real tax advice, please consult with a certified CPA or tax attorney.
« Last Edit: Feb 21st, 2005, 11:25am by MJ »
JP
Re: Taxes and poker
« Reply #1 on: Jan 5th, 2005, 7:07pm »
Is bonus money taxable?
I know I have to pay taxes (even more that normal) on my work bonus, but I thought I would ask to make sure.
MJ
Re: Taxes and poker
« Reply #2 on: Jan 5th, 2005, 9:47pm »
Bonus money... that's a good question. It's considered income, but not necessarily 'gambling' income. It would probably be a bit pain to send it into the 'Other Income' category, so the easiest way is to probably lump it with 'Gambling Income'.
idontthinkso
Re: Taxes and poker
« Reply #3 on: Jan 13th, 2005, 9:16am »
on turbo tax it asks you if you have LOST any money gambling. What happens if you answer yes and report the amount you lost?
snickers99
Re: Taxes and poker
« Reply #4 on: Jan 14th, 2005, 2:02pm »
on Jan 13th, 2005, 9:16am, idontthinkso wrote:
on turbo tax it asks you if you have LOST any money gambling. What happens if you answer yes and report the amount you lost?
Standard disclaimer...I'm not a tax expert, but...
I believe you can only claim losses if you are also claiming winnings. For example, you go to Las Vegas for a week in February and win $200 (stupid fish don't know how to play). And, being the upstanding American you are, you plan on claiming that on your taxes. You go back to Vegas in June and lose $75 (damn...sucked out on the river AGAIN. Stupid fish don't know how to play). You can only claim that $75 loss if you also claim the $200 win. So, your tax liability would be on the total of $125 (win minus loss). Of course, how you're supposed to prove all this, I don't know.
Someone please correct me if I'm wrong.
JP
Re: Taxes and poker
« Reply #5 on: Jan 14th, 2005, 2:16pm »
snickers,
That sounds right to me, but I think that is only if you claim live B&M winnings.
Online taxes take the whole year into consideration. I believe you take your BR at the beggining of the year, and then look what it is at the end of the year. If you are postive (in the black) for the year, you claim those winnings. If you are negative (in the red) for the year, you don't claim any type of gambling winnings/losses.
Someone can correct me if I am wrong.
BTW, I think it is funny that online gambling is illegal (I know, grey area), but that Uncle Sam will still take a cut. Sad
BBoBs
Re: Taxes and poker
« Reply #6 on: Jan 14th, 2005, 8:37pm »
Just one point on the starter post about neteller.
Neteller has 2 companies one based in the US and the other which last year got a listing on the UK exchanges and is based in the UK (for European customers). The Neteller debit card is issued by a canadian bank, as all transactions on it are in Canadian dollars.
zillbanks
Re: Taxes and poker
« Reply #7 on: Jan 26th, 2005, 3:48pm »
Okay I know this is going a little bit off the tangent but it falls along the same line as gambling and taxes. Richard Hatch from the first ever survivor show didn't claim his 1 million dollar prize from winning the show. And now he faces up to 6 years in prison not to mention a ton of fines. What a dumbass! Undecided Did he not think anyone would notice?!~ christ it was on national tv! I guess the slogan outlast, outwit, and outplay doesn't fly with the IRS.
markcpp
Re: Taxes and poker
« Reply #13 on: Feb 20th, 2005, 5:09pm »
Here's a question on poker winnings and taxes.
Do you claim only what you have cashed out or what you are currently up in you party poker account?
I have the mindset that I've not "won" anything until it is in my bank account, so I'm inclined to treat it that way.
Anyone else do the same? Probably either is sufficient as long as you are consistent year to year.
Mark
JP
Re: Taxes and poker
« Reply #14 on: Feb 20th, 2005, 7:03pm »
Money in your account is your money. I count that in my taxes whethere or not it is currently in my bank account.
MJ
Re: Taxes and poker
« Reply #15 on: Feb 21st, 2005, 11:32am »
on Feb 20th, 2005, 5:09pm, markcpp wrote:
Do you claim only what you have cashed out or what you are currently up in you party poker account?
I have the mindset that I've not "won" anything until it is in my bank account, so I'm inclined to treat it that way.
That's what I do. "Technically" not the correct way by the IRS, but I'm not about to record every single session I play in a spreadsheet. That's just ridiculous for me. It's not like I can hide any money from the IRS considering it's all done via EFT from "NETELLER.COM". I figure as long as the government gets its "fair share" my earnings, we're both happy. Well, as happy as you get when 1/3rd of what you make goes toward Uncle Sam..
Will Farnsworth
Re: Sticky: Taxes and poker
« Reply #16 on: Mar 9th, 2005, 12:18pm »
Hmm, claiming rakes as expenses could be very nice, and perhaps profitable.
J
Re: Sticky: Taxes and poker
« Reply #17 on: May 4th, 2005, 12:52pm »
that's an interesting idea, what do you think MJ? I know you have read the law more than I have... it seems like it is an expense to play... I think the problem is tracking the expense... if only we could get the poker rooms to send us a "receipt" for all the rake that we payed. Possibly poker tracker is enough to keep that for the IRS purposes?
MJ
Re: Sticky: Taxes and poker
« Reply #18 on: May 9th, 2005, 4:06pm »
If you're a professional poker player (3 years of records, more than 50% of income derived from poker) then you can probably claim rake and tournament fees as deductions. Since rake is already taken out of the pot however, it's almost like it's own deduction.
PT would be the best program of choice for keeping a log book, but.. the caveat is that PT only logs online games, which are the grey area in terms of legality. For live games, it would be close to impossible to try and track your rake.
Mousey
Re: Sticky: Taxes and poker
« Reply #19 on: May 9th, 2005, 4:24pm »
Why is the extra Income, assuming positive categorized anyways? Does it matter where you get it from?
I remember a case where these ladies won a car on the Oprah show and the IRS billed them for the Taxes of such an item.
I don't think you have to track to the hand your win loss record. Just more over:
I started with 100. I now have 500. I owe 400 in taxable income. It doesn't matter if you won it at poker, through the lottery, through an online rebate or whatever.
I don't see why online gaming is considered an outlawed event. The law on the matter says no gambling on land, and the IRS mantains a business to its address. Isn't party poker based in UK?
MJ
Re: Sticky: Taxes and poker
« Reply #20 on: May 9th, 2005, 7:22pm »
Party poker is kinda in a weird zone. Their support and development is based in India, their main HQ is based in Gibraltar, the DO have offices in London and their servers were located in Canada last I checked.
R_Brite_TDX
Re: Sticky: Taxes and poker
« Reply #21 on: Jun 2nd, 2005, 10:36am »
Hey guys, I think I am going to cash out $1500 of my poker account... do you guys see this as being a problem if I dont claim it. I figure they won't care for only 1500 bucks. Think I should cash it at a check cashing place or just take it to my bank.
Terminal
Re: Sticky: Taxes and poker
« Reply #22 on: Jun 2nd, 2005, 1:58pm »
on Jun 2nd, 2005, 10:36am, R_Brite_TDX wrote:
Hey guys, I think I am going to cash out $1500 of my poker account... do you guys see this as being a problem if I dont claim it. I figure they won't care for only 1500 bucks. Think I should cash it at a check cashing place or just take it to my bank.
They will care if you don't claim it, as long as they never find out your ok. I believe any deposit to your bank account over $10K is reported to the IRS. So a $1500 deposit shouldn't raise any flags, but if you really want to keep it off the RADAR then perhaps a check cashing place would be in order. What kind of fee do they charge?
BigDil511
Re: Sticky: Taxes and poker
« Reply #23 on: Jun 10th, 2005, 12:17pm »
You are correct 10,000 is report or more I have cashed out more than 3000 and it won't be shown to them, now whether I shown them or not we will see what I have at the end of the year.
MJ
Re: Sticky: Taxes and poker
« Reply #24 on: Jun 18th, 2005, 6:32pm »
No offense guys, but talking about how to evade the IRS is like playing Monday night quarterback.
The IRS *really* knows their shit and with the recent terrorism laws and privacy protections being thrown out the window, your banking information isn't nearly as safe as you think it is. $10,000 is no longer the limit that gets reported and the government doesn't need any warrant to come taking a look into your account with the proper angle.
Online poker = offshore entities. Offshore entities = linked to terrorism. Thus, poker = possible link to terrorism. Thus, your information = open to investigation. Of course, you'll say "Oh yeah right, whatever, poker has nothing to do with terrorism, this is ridiculous." and I would agree. However, the government isn't in the business of concerning itself with whether or not you agree with it's policies. It's in the business of taking it's cut of what you earn, so I would be VERY careful about ANY tax evasion ideas that any of you may be thinking about.
After all, gambling against the house is -EV.
BluffTTU
Re: Sticky: Taxes and poker
« Reply #30 on: Sep 18th, 2005, 7:07pm »
I know I'm sort of bumping an old topic, and its almost an irrelevant topic to me unless I start making a substantial profit from gambling, but I have a few questions on what would be the outcome...
First off, as I understand it, you only have to be 18 to gamble online, and obviously the law is 21 in live casinos. So if an under-21 person filed income under gambling income, would they be punishible for gambling?
On a side note, what about home games, should income from home gambling games be reported? Such as a regular weekly game?
Just for future reference.
Thanks
MJ
Re: Sticky: Taxes and poker
« Reply #31 on: Sep 19th, 2005, 9:11pm »
Technically, all income should be reported no matter what. Technically, the IRS only is in the business of taxing Uncle Sam's fair share and does not report your actions to the government, regardless of what you do.
In reality, the IRS likes to report on what you do. In reality, the IRS also doesn't need to know about the money you win in home games, unless you are playing for some big money games where you are winning in the thousands.
As for online poker, the IRS can't really do anything about you playing online - the government can, but it's in a legal limbo at the moment. Sorta. Just take issue in that there are many, many bigger fish to fry, so you probably don't need to worry.
PokerFreek
Re: Sticky: Taxes and poker
« Reply #33 on: Dec 9th, 2005, 2:55pm »
I don't know if anyone is still reading this thread by now, but I will post it other places - if the subject is still ongoing.
I won a Binion's Tournament in Vegas and the tourney director pulled me to the side and told me a tip since I had to sign a 1099B for the winnings.
He said you will be showing the winnings with this, but the only way to really show losses is to have good documentation. He asked if I lived near a horse track. Living in Dallas/Fort Worth there isn't much we don't have except casions, but we have a horse track. He said go around and collect all the losing tickets you can find. Go to the high rollers area if possible. The reason why is the ticket shows the date stamp and the amount wagered, but has no ones name. Keep these as your gambling loses.
Hope this helps others, but hurry cause you only have 3 weeks left and I think the racing season is pretty much over...don't really follow it that much. I went one night to the races and collected $1300 in losing tickets. I will be able to save over half on my winnings...you do the math.
-FREEK-
Sticky: Taxes and poker
« on: Jan 4th, 2005, 9:59pm »
This seemed to be the topic on the pokercharts thread, so I thought I'd make a new one here that was a bit more visible.
Anyhow, since tax prep season is in swing now, I'm sure a lot of you have questions about poker taxes, Neteller and the like.
First disclaimer is that I am not a CPA or any type of legal counsel, so don't take my word for anything other than opinion and always refer to a licensed CPA or tax lawyer for legitimate advice. So again, I Am Not A Tax Lawyer. That being said..
Q: How do I pay taxes on my poker income?
A: To start off, poker, taxes and the IRS is a pretty bad combination. Under the letter of the law, you are supposed to keep a logbook of every session you play, how much you won each session and how much you lost each session. You also need a way of verifying the data in your logbook. This is reason #529 to have and use Poker Tracker.
So at the end of the year, you tally how much you won over all your sessions, how much you lost, then pay the IRS on your winnings. This is counted as 'Gambling Income' on your 1040 I believe.
Q: Um... crap, what if my book keeping is not quite that great?
A: If, however, you are not by birth a die-hard book keeper like the IRS wants you to be; but you are still interested in reporting your income, the easiest method is to report your net income regarding your cash on hand account. Note that in the event of an audit, this is likely not going to be sufficient for the IRS. (However, paying taxes on this income will likely lead to a situation of not being audited by the IRS to begin with.)
As an example of poker income, if you cash in and cash out from your bank account to Neteller, the total net income in your bank from poker activities is what you should report. Again however, in full legal requirement, the IRS would require that you report all income earned, even if it is sitting in your Party Poker or Neteller account.
Q: Do I HAVE to pay money on my poker income?
A: If you want to follow the law, yes.
Q: Is Party/Empire/Neteller based in the US and do they report my income to the IRS?
A: Party and Empire are technically based off-shore, but generally pay off their players through US banks; meaning that there is a paper trail on your funds when you are paid out. Neteller is technically based off shore as well, but is HQ'ed in Canada. Neteller as a foreign entity, is not required to report to the IRS.
However, Neteller did/does require users to create account with the last four digits of their social security number, so it is possible for them to cross-check and easily come up with your whole social, if need be. While not explicit, Neteller seems to indicate that they would cooperate with the US government concerning any investigation or reporting.
Party Poker and Empire Poker, as international companies, are not required and do not report your winnings or losses to the United States IRS.
Q: Is the Neteller Debit card considered an international debit account?
A: It is issued by a US based bank, so no. All transactions would be under US jurisdiction.
Q: I heard on XXX newsgroup that I could take my Party Poker check to a check-cashing store/branch and the money would be unreported to the IRS. Is this true?
A: Technically, this transaction is probably not being reported to the IRS unless you are cashing checks of over $5,000. Depending on the type of store you take your check to, they can charge anywhere from 3% to 15% of the value of the check and also require personal identification as well. If personal identification is required, there will be a papertrai regarding your personal information.
Q: What are the chances of being audited by the IRS?
A: Not very high, unless your financial activities have triggered a flag in the system or you are the lucky recipient of a random audit. In the event that you are audited and are found to owe money to the IRS, a penalty will be assessed against you, ranging from penalty + interest in cases of oversight/accident, to severe penalty + interest + possible legal action in cases of purposeful tax evasion.
In an IRS audit, the audit also covers your last 3 fiscal tax years. This means that you need to provide documentation for all previous years if required to do so.
Q: Is there any way to make my poker income business related, like if I already own a business or wish to call my poker income self-employment income?
A: Yes and no. Yes, in that it is theoretically possible, but in order to call your poker income part of a business, you need 3 years of verifiable (and taxed) records showing that your primary source of income is through gambling/poker. If you are able to have this type of documentation, then you are able to declare your income as business.
Q: Why would anyone want to declare their poker income as business?
A: In short, write-offs. For example, if you have the itching to 4-table, you could always buy a 19" LCD and write that off as a 1-to-1 business expense. If you want to make your ROI shoot through the roof, you can also have your tournament buy-ins deducted as a business expense as well. Want to take a trip to vegas to play poker? No prob, business expense as well. Computers, office furniture, rent, DSL/phone, med insurance - all of these are to some extent or another deductible if you count your poker income as business. Of course, to meet these requirements, it's just about impossible with what the IRS has going on..
Q: Isn't online gambling still technically illegal? And if I pay taxes on it, am I incriminating myself?
A: In certain states and in a very, very gray federal law, online gambling is considered illegal. To date however, only one (two?) individuals have actually been charged with gambling online. Technically, the IRS is also bounded by laws to not report your source of income (which they won't know if your gambling income is casino or online based unless you are audited). That said, the IRS has a bad reputation of not following these laws and have in the past provided other agencies with tips regarding illegal financial activities - but, this normally involved large scale drug, money laundering and mob activities.
Q: Is there any type of legal way of lowering my poker taxes, through any tricks or loopholes?
A: This would have to be betwene you and your CPA. The only ways to write-off taxes is to operate as a business / sole proprietorship. As stated earlier, if you operated your own 'poker' business, you need proper documentation and proof of gambling as your fixed income. The only other business that revolves around poker are poker affilites, whose income is not considered gambling and thus are required to report as business. Affiliates are paid by most sites in the same method as the site's players.. These people still have to pay quarterly estimated tax and self-employment taxes, but with the benefit of business write-offs (but not tournament write-offs). Again, if you wish to pursue further, talking with your CPA is a your best bet.
Q: What is MJ's person opinion about gambling with the IRS?
A: MJ's view is that gambling with the IRS is like speeding. The faster you go, the more likely you are to get caught and the more you pay. Tickets from the IRS are also about a digit or two more painful as well.
Anyhow, this is all that I could think about off the top of my head. A lot of this is already in the Party Poker faq, but thought to re-type it here. If anyone has questions, I will try to answer them as best as I can.
Again, if you want real tax advice, please consult with a certified CPA or tax attorney.
« Last Edit: Feb 21st, 2005, 11:25am by MJ »
JP
Re: Taxes and poker
« Reply #1 on: Jan 5th, 2005, 7:07pm »
Is bonus money taxable?
I know I have to pay taxes (even more that normal) on my work bonus, but I thought I would ask to make sure.
MJ
Re: Taxes and poker
« Reply #2 on: Jan 5th, 2005, 9:47pm »
Bonus money... that's a good question. It's considered income, but not necessarily 'gambling' income. It would probably be a bit pain to send it into the 'Other Income' category, so the easiest way is to probably lump it with 'Gambling Income'.
idontthinkso
Re: Taxes and poker
« Reply #3 on: Jan 13th, 2005, 9:16am »
on turbo tax it asks you if you have LOST any money gambling. What happens if you answer yes and report the amount you lost?
snickers99
Re: Taxes and poker
« Reply #4 on: Jan 14th, 2005, 2:02pm »
on Jan 13th, 2005, 9:16am, idontthinkso wrote:
on turbo tax it asks you if you have LOST any money gambling. What happens if you answer yes and report the amount you lost?
Standard disclaimer...I'm not a tax expert, but...
I believe you can only claim losses if you are also claiming winnings. For example, you go to Las Vegas for a week in February and win $200 (stupid fish don't know how to play). And, being the upstanding American you are, you plan on claiming that on your taxes. You go back to Vegas in June and lose $75 (damn...sucked out on the river AGAIN. Stupid fish don't know how to play). You can only claim that $75 loss if you also claim the $200 win. So, your tax liability would be on the total of $125 (win minus loss). Of course, how you're supposed to prove all this, I don't know.
Someone please correct me if I'm wrong.
JP
Re: Taxes and poker
« Reply #5 on: Jan 14th, 2005, 2:16pm »
snickers,
That sounds right to me, but I think that is only if you claim live B&M winnings.
Online taxes take the whole year into consideration. I believe you take your BR at the beggining of the year, and then look what it is at the end of the year. If you are postive (in the black) for the year, you claim those winnings. If you are negative (in the red) for the year, you don't claim any type of gambling winnings/losses.
Someone can correct me if I am wrong.
BTW, I think it is funny that online gambling is illegal (I know, grey area), but that Uncle Sam will still take a cut. Sad
BBoBs
Re: Taxes and poker
« Reply #6 on: Jan 14th, 2005, 8:37pm »
Just one point on the starter post about neteller.
Neteller has 2 companies one based in the US and the other which last year got a listing on the UK exchanges and is based in the UK (for European customers). The Neteller debit card is issued by a canadian bank, as all transactions on it are in Canadian dollars.
zillbanks
Re: Taxes and poker
« Reply #7 on: Jan 26th, 2005, 3:48pm »
Okay I know this is going a little bit off the tangent but it falls along the same line as gambling and taxes. Richard Hatch from the first ever survivor show didn't claim his 1 million dollar prize from winning the show. And now he faces up to 6 years in prison not to mention a ton of fines. What a dumbass! Undecided Did he not think anyone would notice?!~ christ it was on national tv! I guess the slogan outlast, outwit, and outplay doesn't fly with the IRS.
markcpp
Re: Taxes and poker
« Reply #13 on: Feb 20th, 2005, 5:09pm »
Here's a question on poker winnings and taxes.
Do you claim only what you have cashed out or what you are currently up in you party poker account?
I have the mindset that I've not "won" anything until it is in my bank account, so I'm inclined to treat it that way.
Anyone else do the same? Probably either is sufficient as long as you are consistent year to year.
Mark
JP
Re: Taxes and poker
« Reply #14 on: Feb 20th, 2005, 7:03pm »
Money in your account is your money. I count that in my taxes whethere or not it is currently in my bank account.
MJ
Re: Taxes and poker
« Reply #15 on: Feb 21st, 2005, 11:32am »
on Feb 20th, 2005, 5:09pm, markcpp wrote:
Do you claim only what you have cashed out or what you are currently up in you party poker account?
I have the mindset that I've not "won" anything until it is in my bank account, so I'm inclined to treat it that way.
That's what I do. "Technically" not the correct way by the IRS, but I'm not about to record every single session I play in a spreadsheet. That's just ridiculous for me. It's not like I can hide any money from the IRS considering it's all done via EFT from "NETELLER.COM". I figure as long as the government gets its "fair share" my earnings, we're both happy. Well, as happy as you get when 1/3rd of what you make goes toward Uncle Sam..
Will Farnsworth
Re: Sticky: Taxes and poker
« Reply #16 on: Mar 9th, 2005, 12:18pm »
Hmm, claiming rakes as expenses could be very nice, and perhaps profitable.
J
Re: Sticky: Taxes and poker
« Reply #17 on: May 4th, 2005, 12:52pm »
that's an interesting idea, what do you think MJ? I know you have read the law more than I have... it seems like it is an expense to play... I think the problem is tracking the expense... if only we could get the poker rooms to send us a "receipt" for all the rake that we payed. Possibly poker tracker is enough to keep that for the IRS purposes?
MJ
Re: Sticky: Taxes and poker
« Reply #18 on: May 9th, 2005, 4:06pm »
If you're a professional poker player (3 years of records, more than 50% of income derived from poker) then you can probably claim rake and tournament fees as deductions. Since rake is already taken out of the pot however, it's almost like it's own deduction.
PT would be the best program of choice for keeping a log book, but.. the caveat is that PT only logs online games, which are the grey area in terms of legality. For live games, it would be close to impossible to try and track your rake.
Mousey
Re: Sticky: Taxes and poker
« Reply #19 on: May 9th, 2005, 4:24pm »
Why is the extra Income, assuming positive categorized anyways? Does it matter where you get it from?
I remember a case where these ladies won a car on the Oprah show and the IRS billed them for the Taxes of such an item.
I don't think you have to track to the hand your win loss record. Just more over:
I started with 100. I now have 500. I owe 400 in taxable income. It doesn't matter if you won it at poker, through the lottery, through an online rebate or whatever.
I don't see why online gaming is considered an outlawed event. The law on the matter says no gambling on land, and the IRS mantains a business to its address. Isn't party poker based in UK?
MJ
Re: Sticky: Taxes and poker
« Reply #20 on: May 9th, 2005, 7:22pm »
Party poker is kinda in a weird zone. Their support and development is based in India, their main HQ is based in Gibraltar, the DO have offices in London and their servers were located in Canada last I checked.
R_Brite_TDX
Re: Sticky: Taxes and poker
« Reply #21 on: Jun 2nd, 2005, 10:36am »
Hey guys, I think I am going to cash out $1500 of my poker account... do you guys see this as being a problem if I dont claim it. I figure they won't care for only 1500 bucks. Think I should cash it at a check cashing place or just take it to my bank.
Terminal
Re: Sticky: Taxes and poker
« Reply #22 on: Jun 2nd, 2005, 1:58pm »
on Jun 2nd, 2005, 10:36am, R_Brite_TDX wrote:
Hey guys, I think I am going to cash out $1500 of my poker account... do you guys see this as being a problem if I dont claim it. I figure they won't care for only 1500 bucks. Think I should cash it at a check cashing place or just take it to my bank.
They will care if you don't claim it, as long as they never find out your ok. I believe any deposit to your bank account over $10K is reported to the IRS. So a $1500 deposit shouldn't raise any flags, but if you really want to keep it off the RADAR then perhaps a check cashing place would be in order. What kind of fee do they charge?
BigDil511
Re: Sticky: Taxes and poker
« Reply #23 on: Jun 10th, 2005, 12:17pm »
You are correct 10,000 is report or more I have cashed out more than 3000 and it won't be shown to them, now whether I shown them or not we will see what I have at the end of the year.
MJ
Re: Sticky: Taxes and poker
« Reply #24 on: Jun 18th, 2005, 6:32pm »
No offense guys, but talking about how to evade the IRS is like playing Monday night quarterback.
The IRS *really* knows their shit and with the recent terrorism laws and privacy protections being thrown out the window, your banking information isn't nearly as safe as you think it is. $10,000 is no longer the limit that gets reported and the government doesn't need any warrant to come taking a look into your account with the proper angle.
Online poker = offshore entities. Offshore entities = linked to terrorism. Thus, poker = possible link to terrorism. Thus, your information = open to investigation. Of course, you'll say "Oh yeah right, whatever, poker has nothing to do with terrorism, this is ridiculous." and I would agree. However, the government isn't in the business of concerning itself with whether or not you agree with it's policies. It's in the business of taking it's cut of what you earn, so I would be VERY careful about ANY tax evasion ideas that any of you may be thinking about.
After all, gambling against the house is -EV.
BluffTTU
Re: Sticky: Taxes and poker
« Reply #30 on: Sep 18th, 2005, 7:07pm »
I know I'm sort of bumping an old topic, and its almost an irrelevant topic to me unless I start making a substantial profit from gambling, but I have a few questions on what would be the outcome...
First off, as I understand it, you only have to be 18 to gamble online, and obviously the law is 21 in live casinos. So if an under-21 person filed income under gambling income, would they be punishible for gambling?
On a side note, what about home games, should income from home gambling games be reported? Such as a regular weekly game?
Just for future reference.
Thanks
MJ
Re: Sticky: Taxes and poker
« Reply #31 on: Sep 19th, 2005, 9:11pm »
Technically, all income should be reported no matter what. Technically, the IRS only is in the business of taxing Uncle Sam's fair share and does not report your actions to the government, regardless of what you do.
In reality, the IRS likes to report on what you do. In reality, the IRS also doesn't need to know about the money you win in home games, unless you are playing for some big money games where you are winning in the thousands.
As for online poker, the IRS can't really do anything about you playing online - the government can, but it's in a legal limbo at the moment. Sorta. Just take issue in that there are many, many bigger fish to fry, so you probably don't need to worry.
PokerFreek
Re: Sticky: Taxes and poker
« Reply #33 on: Dec 9th, 2005, 2:55pm »
I don't know if anyone is still reading this thread by now, but I will post it other places - if the subject is still ongoing.
I won a Binion's Tournament in Vegas and the tourney director pulled me to the side and told me a tip since I had to sign a 1099B for the winnings.
He said you will be showing the winnings with this, but the only way to really show losses is to have good documentation. He asked if I lived near a horse track. Living in Dallas/Fort Worth there isn't much we don't have except casions, but we have a horse track. He said go around and collect all the losing tickets you can find. Go to the high rollers area if possible. The reason why is the ticket shows the date stamp and the amount wagered, but has no ones name. Keep these as your gambling loses.
Hope this helps others, but hurry cause you only have 3 weeks left and I think the racing season is pretty much over...don't really follow it that much. I went one night to the races and collected $1300 in losing tickets. I will be able to save over half on my winnings...you do the math.
-FREEK-
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