taxes

[Jdiddy]

id really love to hear from u guys about this bc my dad is buggin over the money i am making and the tax issue.

i play on pokerstars, and im cashing out , say, 1000 a month.

is it neccessary to fill out any paperwork for the government to collect taxes on it? i really have no idea what we are supposed to do.

is there anyone in my same situation (not the not knowing about taxes thing, what i mean is the making 1000 a month thing) who does\does not fill out anything for the government who can tell me what they do.

[eric5148]

Yes, you need to pay taxes. Get the book "The Gambler's Guide To Taxes" by Walter L. Lewis. Or get an accountant.

[Jeffage]

Consult an accountant. Should run you about $200. He will set you up to pay quarterly estimated taxes.

Jeff

[Karatitis]

Well, I think it depends on what jurisidiction you live doesn't it?

For example, I live in Canada, play on Empire and have cashed out thousands more than I put in, but I don't declare because in Canada gambling winnings are not taxable.

However, there is a provision in most tax codes like U.S. or Canada that if someone ostensibely makes their living solely from poker than an audit might be done and they would have to start declaring. I dunno, but I suspect not until your chartered bank alerts authorities that this might happen, so it would have to be very big numbers (in relation to say your income from a day job).

Having said all this, jurisidictional issues are very complex, especially as it relates to internet, age of consent, et al, and I'm not a lawyer, nor an accountant.

[Leavenfish]

I'll be seeing a professional come tax time next year.

Question: I 'whore' a lot...move moveny in and out of Neteller...but I have yet to cash out to a bank this year. When are you accountable taxwise: In the year you make a single dollar...or the year you cash out to your bank in? IE: should I wait till January 1, 2006 to make my first withdrawl back to my regular bank?

---Leavenfish

[4_2_it]

Taxes are due on gambling winnings when they are earned, not when they are cashed out. If anyone is cashing out large sums of poker eanings he (or she) can afford to spend some $$$ and consult a true tax professional who can assess what he (she) must do to comply with the US Tax Code. Don't listen to a bunch of posters on an Internet gambling chat room, though some of us are CPAs or lawyers /images/graemlins/wink.gif

One day the Congress will wake up and legalize Internet gambling. Then each site will have to provide the player with the proper 1099 form, which will make evading the tax man EV-.

[MrVanDresen]

alot of you are so paranoid its laughable! /images/graemlins/laugh.gif

unless you are cashing out hugh sums, lets say over 5 grand at a time and making it your sole income, you don't really need to worry.

I talked to an accountant and he said winnings under a couple grand here and there are so minimal no need to worry. It would be like a waitor or babysitter claiming ever dollar they make.

The government would waste more money and manpower on trying to collect the money you owe for it to even be worth it to them.

SO TO ALL YOU PARANOID freaks!!! GROW A SAC ! /images/graemlins/tongue.gif

[MrVanDresen]

alot of you are so paranoid its laughable! /images/graemlins/laugh.gif

unless you are cashing out hugh sums, lets say over 5 grand at a time and making it your sole income, you don't really need to worry.

I talked to an accountant and he said winnings under a couple grand here and there are so minimal no need to worry. It would be like a waitor or babysitter claiming ever dollar they make.

The government would waste more money and manpower on trying to collect the money you owe for it to even be worth it to them.

[Punker]

Its not a matter of whether or not they try to collect from everyone. Its a matter of whether or not they try to collect from you.

Good luck with your chosen course.

[PuertoKid]

[ QUOTE ]
id really love to hear from u guys about this bc my dad is buggin over the money i am making and the tax issue.


[/ QUOTE ]

Online Poker Tax Info (http://www.onlinepokerfaq.com/guide/tax-links.html)

Be particularly careful about documenting each session you play and don't be tempted to subtract your losses from your winnings--you have to take your losses as itemized deductions!

If you look closely, I'm sure that you'll find that though you are cashing out $1k a month, you are actually seriously in the red if you do your taxes correctly.

Your Dad is very right to be concerned about the tax implications of your online poker play. It is very very hard to do your taxes according to the law as a non professional and make any money.

[GMan42]

[ QUOTE ]

If you look closely, I'm sure that you'll find that though you are cashing out $1k a month, you are actually seriously in the red if you do your taxes correctly.


[/ QUOTE ]

Good God...if this is accurate I'm gonna shoot myself (this is my 1st year playing seriously and cashing out a profit every month). Is it anyone else's experience that the jump in tax bracket (due to the higher gross income) actually makes it useless to be a 1K/month player?

[PuertoKid]

[ QUOTE ]
Is it anyone else's experience that the jump in tax bracket (due to the higher gross income) actually makes it useless to be a 1K/month player?

[/ QUOTE ]

It is only partially related to having a higher income. It is mainly due to the fact that you are supposed to report your winnings from each session as income, while you must report your losses from each session as an itemized deduction. So, if you play tomorrow morning and win $100, and play tomorrow afternoon and lose $80, you must report income of $100 for the morning session. You can apply the $80 loss to your itemized deductions--you cannot subtract it from your winnings. If over the course of the year you have a total of $42,000.00 in winning sessions and $30,000 in losing sessions, you must report $42,000 in poker income. You can apply $30,000 to itemized deductions, but how much of that actually translates into reducing your income depends very much on your financial situation outside of poker. It is quite possible that you can make $12,000 but the tax consequences of increasing your total income and going from standard deduction to itemizing can completely wipe out your $12 in profit. Indeed, it can leave you in the hole.

[good2cu]

Let's say for example that I have a friend, who is 18, has never had a job before is making 4-5k a month playing poker and cashes it all out through checks or using the neteller debit card or even EFT? What would the chances that said person would get busted for tax evasion.

[qsdaddy]

[ QUOTE ]
Let's say for example that I have a friend, who is 18, has never had a job before is making 4-5k a month playing poker and cashes it all out through checks or using the neteller debit card or even EFT? What would the chances that said person would get busted for tax evasion.

[/ QUOTE ]
About .001% imho........

[BottlesOf]

[ QUOTE ]
hugh sums

[/ QUOTE ]

To the OP: If you ever make a decision based on advice from a guy who wrote that, not once, but in two narly identical posts, you deserve to be audited for the rest of your life.

[sthief09]

can you just ban him please?

[MrVanDresen]

its called a typo douche, look into it. Oh I forgot you are special your name is in green for having no life /images/graemlins/grin.gif

[sthief09]

you being a [censored] moron is a lot more likely than you accidentally twice hitting the 'h' key instead of the 'e' key

[grinin]

sthief,

You need to use the "ignore this user" button and not have to see his drivel at all.

Please do NOT ban him unless you can just ban his IP. Because he will simply come back in some other incarnation that I will again have to wade through a bunch of his crap before I realize it is the same guy and ignore again.

[kev0ut]

[ QUOTE ]
[ QUOTE ]
id really love to hear from u guys about this bc my dad is buggin over the money i am making and the tax issue.


[/ QUOTE ]

Online Poker Tax Info (http://www.onlinepokerfaq.com/guide/tax-links.html)

Be particularly careful about documenting each session you play and don't be tempted to subtract your losses from your winnings--you have to take your losses as itemized deductions!

If you look closely, I'm sure that you'll find that though you are cashing out $1k a month, you are actually seriously in the red if you do your taxes correctly.

Your Dad is very right to be concerned about the tax implications of your online poker play. It is very very hard to do your taxes according to the law as a non professional and make any money.

[/ QUOTE ]

How is this possible? It seems pretty ridiculous.

[KyleM]

[ QUOTE ]
Let's say for example that I have a friend, who is 18, has never had a job before is making 4-5k a month playing poker and cashes it all out through checks or using the neteller debit card or even EFT? What would the chances that said person would get busted for tax evasion.

[/ QUOTE ]

use the neteller debit card and your fine /images/graemlins/grin.gif

[grinin]

You have said this on more than one occasion.
However, if you note the neteller debit card is issued by a US bank that will be more than willing to give over all their/your records if they are requested to by the US government. If for some reason the feds decided that the majority of neteller debit card users were tax evaders what would prevent them from requesting the banks records?

[Karatitis]

Yeah, well that's your US Congress making laws for residents in US jurisictions.

All this stuff is not relevant if someone resides in Canada (as far as I know about taxation).

[crunchy1]

[ QUOTE ]
note the neteller debit card is issued by a US bank that will be more than willing to give over all their/your records if they are requested to by the US government.

[/ QUOTE ]
Note that this is entirely irrelevant because if the government asks you for YOUR records YOU'RE going to have to give them up - or spend some time in jail and pay some fines.

[mistrpug]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
id really love to hear from u guys about this bc my dad is buggin over the money i am making and the tax issue.


[/ QUOTE ]

Online Poker Tax Info (http://www.onlinepokerfaq.com/guide/tax-links.html)

Be particularly careful about documenting each session you play and don't be tempted to subtract your losses from your winnings--you have to take your losses as itemized deductions!

If you look closely, I'm sure that you'll find that though you are cashing out $1k a month, you are actually seriously in the red if you do your taxes correctly.

Your Dad is very right to be concerned about the tax implications of your online poker play. It is very very hard to do your taxes according to the law as a non professional and make any money.

[/ QUOTE ]

How is this possible? It seems pretty ridiculous.

[/ QUOTE ]

That's because it is ridiculous. You will only lose out on the standard deduction. Since you will be able to have other deductions like state and local taxes, by the time you're done you might end up losing a little bit of money you would have had from your other income, but that's more than compensated by the $1000 a month you're bringing in.

[mistrpug]

[ QUOTE ]
Is it anyone else's experience that the jump in tax bracket (due to the higher gross income) actually makes it useless to be a 1K/month player?

[/ QUOTE ]

Not even close.

[grinin]

[ QUOTE ]
Note that this is entirely irrelevant because if the government asks you for YOUR records YOU'RE going to have to give them up - or spend some time in jail and pay some fines

[/ QUOTE ]

It is pretty clear that Kyle is under the impression that there is not a paper trail linking him to his use of the Neteller debit card. Since his reason for using the card is so that he can avoid taxes, why would you think that he is is planning on providing any records of these neteller debit card withdrawls in the event of an audit? Kyle's whole point is "Do it this way and they won't catch you" And he would be right if it weren't for a few small details that he has overlooked. Not to mention the fact that he would have to do everything on a cash basis and hope to god the feds don't do a lifestyle audit.

GL Kyle

[BottlesOf]

I can ban his username or IP. I don't know that he's done anything to deserve that though. Being retarded and giving bad advice doesn't qualify, IMO.

[PuertoKid]

Well, I guess I did overstate it and didn't qualify what I meant by "in the red". What I mean is that for a 1k a month player who has a job and takes the standard deduction, you will be taxed on approx 16k of additional income instead of the 12k of income you really made. If you already make $30k/yr and take the standard deduction, your tax liability will be about $1200 more than it would be if you took a 2nd job and made 12k of additional income. That's a 10% gross penalty for poker, which is a big financial hit--particularly if extended over time. If you wind up having a break-even year, you may pay taxes on income you never received.

[mistrpug]

[ QUOTE ]
Well, I guess I did overstate it and didn't qualify what I meant by "in the red". What I mean is that for a 1k a month player who has a job and takes the standard deduction, you will be taxed on approx 16k of additional income instead of the 12k of income you really made. If you already make $30k/yr and take the standard deduction, your tax liability will be about $1200 more than it would be if you took a 2nd job and made 12k of additional income. That's a 10% gross penalty for poker, which is a big financial hit--particularly if extended over time. If you wind up having a break-even year, you may pay taxes on income you never received.

[/ QUOTE ]

All that is correct, but one thing you left out is that if you itemize deductions, there are some other deductions you may be able to make that you would not have otherwise. This can go a long way towards making up for the loss of the standard deduction. I know in my case, my state and local taxes (which you can deduct if you itemize) are so high that I'll barely have to take a hit for losing my standard deduction. I don't know if that's a good thing or a bad thing. :-)

[PuertoKid]

true. I live in WA and there is no state income tax, so I naturally miss that kind of thing.

[winker]

Can't you just have Neteller send you several checks and cash it at a check clearing place instead. They don't report to the IRS do they?

[PuertoKid]

Are you asking if this is a good way to evade paying taxes?

[VegasVixen]

[ QUOTE ]
Can't you just have Neteller send you several checks and cash it at a check clearing place instead. They don't report to the IRS do they?

[/ QUOTE ]

Al Capone didn't go to prison for his illegal activities, he went for failure to pay taxes on the money he made doing them.

If you are at all serious about continuing to play & cash online, whether full-time. part-time, etc., I very strongly suggest you meet with a CPA soon to make sure you are reporting your earnings correctly. The taxes you incur now will seem minimal compared to the fines & penalties you will face later.

[good2cu]

I'm asking what the best way to evade taxes is, for my friend of course.

[KyleM]

seems like this would be extremely unlikely to happen in the given situation. i hope the irs has something better to do than audit random teens that have made next to nothing from working their entire lives...

[Shaun]

[ QUOTE ]
[ QUOTE ]
Can't you just have Neteller send you several checks and cash it at a check clearing place instead. They don't report to the IRS do they?

[/ QUOTE ]

Al Capone didn't go to prison for his illegal activities, he went for failure to pay taxes on the money he made doing them.

If you are at all serious about continuing to play & cash online, whether full-time. part-time, etc., I very strongly suggest you meet with a CPA soon to make sure you are reporting your earnings correctly. The taxes you incur now will seem minimal compared to the fines & penalties you will face later.

[/ QUOTE ]

Al Capone was not an intenet poker player making 1200 a month. He was the leader of a huge organized crime operation that commited multiple counts of murder on his behalf. Let's have some perspective.

[Spaded]

[ QUOTE ]
Al Capone was not an intenet poker player making 1200 a month. He was the leader of a huge organized crime operation that commited multiple counts of murder on his behalf. Let's have some perspective.

[/ QUOTE ]

Exactly! I'll bet the IRS audited him every single year, many times over!

[Overdrive]

[ QUOTE ]


Al Capone was not an intenet poker player making 1200 a month. He was the leader of a huge organized crime operation that commited multiple counts of murder on his behalf. Let's have some perspective.

[/ QUOTE ]

Exactly. Remember a few years ago when Willie Nelson got into trouble with the I.R.S. for failing to pay MILLIONS of dollars in taxes? What did the IRS do to Willie? Well if you remember all Willie did was release a double cd of his hits plus a couple new songs called, "The IRS Tapes." and he had to give all of that money to the IRS. They didn't want to send Willie to the big house.

I'm so glad you added some perspective to some of the insanity in this thread, and every thread about taxes. There is a big difference between Al Capone, Willie Nelson, some guy making a few extra bucks playing poker, and some poker pro making 100,000 plus a year. If you are a pro making 6 figures than you had sure as hell get your tuna boat in order, get a cpa, and file taxes. If you have a job and are filing every year while playing poker for fun making $100 here and there at home games or on the internet or wherever you have a very slim chance of being audited. Alot of people cash out with checks anyway and cash them at stores or whatever to even nullify this small chance. If worse comes to worse and the IRS wants to devote the time and resources to audit you for a few dollars you made paying poker the WORSE that will happen to you is you will have some fines and penalties to pay, you won't go to prison like Al Capone.