Season poker pros have gone used to the grind of losing huge sums of money as they struggle to break the downward spiral and then suddenly experiencing the highs of winning massive sums of money that makes their poker journey all the more worthwhile. US poker pros have a hard time working out their taxes as they have to keep track and balance the amount of money they have wagered, lost and won during a 12 month period.
US Poker Players Must Work Out Their Taxes
Countless of Americans have missed the April 18 tax day deadline and it is highly likely that quite a number of US poker pros have also defaulted on their taxes. This does not come as a surprise as poker pros are a busy bunch, traveling domestically and internationally to play the best poker tournaments and always wait till the last minute to see how much they can cashout with.
Mac VerStandig, an attorney who represents many poker pros, says that it’s both “amazing and endlessly disturbing” that many players are clueless about their tax responsibilities. He warns poker pros that ignoring tax responsibilities doesn’t mean they will go away—it means that it only makes things uglier. A few tax professionals have come together to offers poker pros some valuable advice along with tips to make sure they file their taxes correctly.
Decide If You Really Want To Be A Pro
Playing poker professionally isn’t the glamorous Hollywood life that many people dream of. While it comes with the prospect of a huge payday, a life on the road and tons of freedom, turning to poker as a professional career choice can result in irregular earnings and a hard lifestyle if you are not successful on the felt.
CPA Ray Kondler, a regular at the Rio convention space during WSOP events, reminds players that filing as a professional gambler comes with a self-employment tax, which can add up to an additional 15.3 percent.
In a statement, Kondler said, “Cash flow stability is certainly the biggest consideration in jumping off a W-2 and starting a life where your mortgage payment is reliant on your not getting rivered too many times…The biggest mistake professional poker players make is getting too creative without professional help.”
Get A Professional To Help With Taxes
In most cases, it is always better and safer to get a tax professional to help you deal with your taxes. Kondler says that while research can go a long way, having a professional to deal with your taxes will give you peace.
Players are advised to work on their taxes at the earliest and not put things off. If you start early and work with a professional tax consultant, you can come up with a plan that helps you save money and manage your taxes better, rather than sitting on it and taking action at the end of the year which does not give you much time to plan or save.
VerStandig emphasizes that interests and penalties are the “epitome of negative EV” so it’s important to plan ahead and plan with the right people.
Keep Track of Everything
If you are going to do it on your own, that means you have to keep track of everything, absolutely everything—buy-in receipts, ATM receipts, credit card purchases, winnings, and losses. It’s so much easier to keep track of the whole year with all the paper trail and documents to support your activities.
Kondler emphasizes the problem that many poker players face: very little documentation of their wins, losses, and expenses. He explains that it becomes challenging to prove to the IRS all of these tax refunds and filings without the necessary proof. So the best way to prevent hassle and loss of money is to keep a gambling log and a detailed paper trail.
Know Where To Put Your Money
Kondler suggests to establish savings and investment accounts so the money just doesn’t sit inside the bank. Having a professional by your side to manage these things would let you keep moving your money, without the painful process of dealing with the different tax requirements for each of them.
Playing Outside The US
Many US poker pros travel outside the country regularly to play tournaments. Keep in mind that there are only 28 countries around the world that have gambling-based tax treaties with the US so playing in countries not covered by these treaties mean that 30 percent of your winnings is automatically withheld.
 
 

Tight Poker Staff

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Tight Poker Staff

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For nearly two decades, we’ve provided the best in class for poker site reviews, top online poker bonuses, strategy tips, poker news, and exclusive free poker content.  Consisting of a team of poker and gambling experts, we deliver the best online poker brand experience for players of all levels, from the fish to the sharks.
For nearly two decades, we’ve provided the best in class for poker site reviews, top online poker bonuses, strategy tips, poker news, and exclusive free poker content.  Consisting of a team of poker and gambling experts, we deliver the best online poker brand experience for players of all levels, from the fish to the sharks.