taxes

ive been clearing 50 to 100 dollars a night play ing low limit holdem onine. Every now and again i have to withdraw money from my poker funds, and it seems to be adding up. Should i be afraid of the IRS or any taxes that may be owed because of these transactions?

Yes, you must pay taxes. Go to next IRS-Office and pay them off. Better you don't make them come to you ! I think they even take cash theese days.

Disclaimer: I am not a lawyer or accountant. What I am about to post represents my own, possibly uninformed opinion.


There are two questions here.

1. Do I legally owe taxes on my poker winnings?


Absolutely. Under the wonderful tax laws of our great nation, your net winnings for any tax year are subject to income tax.


2. Can I get away with not paying taxes on my poker winnings?


This is a little more dicey. As far as I know, online poker sites do not report cashouts to the IRS. However, since you get the money in the form of an electronic transfer or a check, there is a record of your receipt of the money which could be found in an audit. One advantage of B&M cardrooms is that your buyins and cashouts are usually in cash. Unless you hit a jackpot, or buy in or cash out for more than $10,000 dollars, there is no audit trail. If you withdraw $200 dollars in cash, play poker and spend $500 dollars in cash. There is no way the IRS can prove it. I will let others debate whether this is ethical.

i just made a 200 withdrawal into my paypal account. I used 150 to open an account at partyP. and 50 went toward buying books. The money never even saw my bank account. Am i required to pay on that too? Help. So much confusion.

It really is not too difficult to figure this stuff out.


First thing you must have is a "Source Document"

ie, ledger. Preferablly a manual one with a hard cover.


Then itemize all your "Ependitures" and "Income"

or "Lossses" maintaing a running balance.


Also log in the same ledger the times and dates you played. The starting figures and the ending figures aka bankrolls.


Also you can deduct whatever portion of your connection expense, computer expense, modem or phone line expenses. Books you buy for gambling are considered educational expenses aka business expenses. Keep receipts of everything and always have the log to fall back on, along with cash outs to pay pal or to your bank. You will be surprised how easy it is to track and document once you get it in place.


Good Luck

Poker Players discussing how to PAY THEIR TAXES. What's this world coming to ?

do you intend to pay the tax if you are supposed to?


if so, ask them - they will tell you exactly how it is - and what they accept as expenses against gambling income


they want to be paid what they are due, but, all joking apart, that's all they want to be paid


they're nice people really - even if they are on

propoker's head-hunt list to play the evening shift for them

You must show a profit for 3 out of 5 consequitive years to claim your poker hobby as a business and utilize the deductions listed by tablrunrr. If I were you I would be very wary of any tax advice given on this site. The one good piece of advice he gave was to keep a detailed journal showing wins and losses by session, location and dates and (technically) other people there during your sessions though this is difficult with online gambling.


As to your question about the $200 not hitting your bank account it does not matter. Still taxable or at least reportable as income subject to documented offsetting losses. But as I stated previously I would not take advice (including my own)on taxes from a forum message board.


Not A TaxMan

By law...you are required to pay taxes on all gambling winnings. If you won $200 at a site and then withdrew it to Paypal then it is taxable. Now if you transfer $150 to Party poker and then lose it all well now you have $50 of overall winnings which you used to buy your books. As far as being able to deduct gambling expenses such as books, computer, etcetera, check with an accountant as I believe this is dependent on whether you play as an amatuer or professionally (not sure about that one).


If you are asking if you can hide this income, I don't recommend it. If you ever get audited, the paper flow can usually lead to the funds...if you ever transfer funds from paypal to your bank account for example. Credit card deposits to paypal, etcetera.


HOpe this helps, MatthewH

Anyone who is smart enough to win playing poker is smart enough to think of many ways to not pay taxes on the money with a 99.99% change of not having a prob.

My advice? Screw the government- do not pay taxes on anything that could easily go unnoticed. As long as you aren't making outrageous purchases (thousands of dollars at a time) I wouldn't worry about paying those bloodsuckers a dime. I can tell you that I will not pay taxes on my poker winnings until someone comes after me. Even if you make 20 grand a year playing online- the IRS has bigger fish to fry. If you get heat, you pay them. If not, enjoy YOUR money that you risked YOUR money to earn. I see that no one else is giving this advice, and if they honestly feel morally obligated to tell you to do the "right" thing, then so be it. I however, do not. I say that we are overtaxed and underrepresented and that the governement will be OK without my few hundred dollars. As long as you are smart about it, they won't come after you unless your winnings become really big.

Well, if no one paid taxes, there would be no government, no military, etc...


I might not agree with everything my government does, but I'm not about to skip out on taxes! The system works. Without taxes, we'd be a lot worse off. If I win $10 over a vegas trip playing luck games, then I'll pay my $3 or so tax on that. I don't think one should decide to not pay his/or her share of taxes.


Of course, nothing wrong with looking for loopholes. /images/wink.gif


- Tony

"Even if you make 20 grand a year playing online- the IRS has bigger fish to fry. If you get heat, you pay them."


When that happens and there is a paper trail for it from your checking account the cost will be high. 50% penalty, with interest from the year you tried to duck the taxes to the present. They will rack you up for every year too.


You're advice, in this post, is the most toxic ever issued here.


Anyone making this kind of money should keep a log of their play, put about 20% aside each month, and have a pro do your taxes.


MS Sunshine

Well to each his own. Report every 10 dollars as one suggested above. I guess we owe it to our government. Afterall, its not like they bow to corporate interests at every turn while spitting in the faces of the average person. Oh... wait...

Commie PRICK

It's not the most perfect system by far, but it's the best out there currently. That's my opinion only! There's merits to all systems.


Now, about the tax rate, that's debatable, but the idea of taxes in general is something I agree with. I don't see how you can choose not to pay taxes if you can get away with it and not feel bad about it. It's the same as everyone in the US paying their taxes, and you go take some cash from the people who do pay tax and pocket it, while those people who do pay tax don't take any money from you in return.


If you do choose not to report, that's fine, but understand that it's wrong at least!


Anyways, this is really off topic. /images/smile.gif


- Tony