poker taxes

[mistrpug]

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- Generally speaking, you are required to pay either quarterly estimated tax or tax withholding on all income. If you get a salaried paycheck, they already withhold taxes; if you generate any other income that is not already withheld, you are expected to pay estimated taxes on it (because the government wants its money now instead of next year). However, if you fail to pay your estimated taxes, there is an allowable margin of error when you file your taxes next year, but if you fall outside this margin (i.e you made TOO much money gambling) you will have to pay an estimated tax penalty; see the instructions for the IRS 1040 for more info (the estimated tax penalty is at the bottom of the second page). Personnally, I just bought a house this year and my real-job income has stayed constant, so my resulting deductions will offset my gambling winnings, so I will not have to pay an estimated tax penalty.

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I was planning on having my non-poker employee withhold extra moeny from my paycheck every week to cover gambling winnings. Do you (or does anybody) know if this is ok?

[theBruiser500]

That woudl be crazy if I had to record every session I played, or even every day. As it is now I think I will have to do it by when I cash out of pokerstars because I haven't kept records. Also getting worried on the deductions, I bought a new computer and a couple flat screen monitors for poker but I don't have a receit, will I not be able to use it as a deduction now?

Say I make $2000 and tax is 20% of that (so $400 in taxes). If I have $100 that can be deducted from my taxes does that mean I'm now taxed $300, or I'm taxed $2000-$100= 20% * $1900?

thanks for the help

[mistrpug]

[ QUOTE ]
That woudl be crazy if I had to record every session I played, or even every day. As it is now I think I will have to do it by when I cash out of pokerstars because I haven't kept records. Also getting worried on the deductions, I bought a new computer and a couple flat screen monitors for poker but I don't have a receit, will I not be able to use it as a deduction now?

Say I make $2000 and tax is 20% of that (so $400 in taxes). If I have $100 that can be deducted from my taxes does that mean I'm now taxed $300, or I'm taxed $2000-$100= 20% * $1900?

thanks for the help

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You're way off man. First off, you don't be able to deduct that stuff unless you file as a business (which the IRS is very tough about so I've heard). As a part time player, just forget that idea.

If you do have deductions, they are subtracted from your gross, not what you pay.

So say you itemize decuctions. First off, you're f'd in that you can't take off the standard deduction of $5000. If you got say $100 of deductions somewhere (taxes paid at the state and local level are deductable for example) you'd deduct that from your total income and you'd have to pay the taxes of that. So in your example, you'd pay taxes on $1900 instead of $2000. And think more along the lines of 25% than 20%.

Sorry if I ruined your day.

[AceHigh]

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the IRS is interested in milking you for every cent they can.

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But the don't need all the itemized details do they? They just need the correct numbers.

With stocks, the IRS has access to your trades that they can confirm your information. With poker, there is no paper trail for the IRS to follow, so if your numbers match your electronic transfers, that will probably keep them happy.