Re: Clarifications about Tax
 

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4) Since I am 19, and "gambling" in US law isn't of legal age yet, but I play on party where age 18 and up is ok I still have to pay gambling taxes?

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I'm not sure what you're talking about here, we have non-tribal 18+ casinos in Washington state.

Re: Clarifications about Tax
 

really? all cardrooms and casinos that aren't "indian" are 21+

Re: Clarifications about Tax
 

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under what circumstances would the IRS look at my account? I am still a dependent, I barely have any net winnings and as far as official records go I have never held even a part time job.(i worked for my aunt for a summer)

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If you are subject to US tax laws, and if you have made $10,000 playing poker and you don't declare it and pay taxes on it, you are in violation of the law, period. Your age, dependency, other employment, the legality of your winnings, etc., etc., are irrelevant. There are a number of ways you can come to the attention of the IRS. For one thing, anyone who knows you play poker and who doesn't like you (like, say, a dumped girl friend) can drop a dime on you and will receive a financial reward if it turns out you have income you didn't declare and pay taxes on. I dare say I myself could make a few bucks by telling the IRS the screen names of all the silly folk who have publicly declared on 2p2 that they don't pay taxes on their poker winnings. The IRS could identify the persons behind the screen names without difficulty, and then the fun would begin. Not of course that I would do such a thing, but I could, and so could anyone else. Banks and other financial institutions send information on accounts to the IRS which matches up what is in people's accounts with what is in their returns. Discrepancies invite audits.

I knew someone who was hounded by the IRS on the grounds that he had not declared money from student bribes (for undeserved good grades). There were, of course, no bribes and no undeclared income, but there was a large pain in the butt for this fellow until it was straightened out. My assumption is that some disgruntled student angry about his/her grade informed the IRS as a means of vengeance that this guy was taking bribes , and the IRS obligingly made his life a misery for a while. He did not have any undeclared income, but if someone drops a dime on you and you do have undeclared income, you are in serious trouble. You can gamble that you won't come to the attention of the IRS, but if you lose, you can lose big. The best you could hope for is that they decide you are an ignorant fool, rather than an out and out tax-dodging crook.

And once again, it is not simply a matter of net winnings....

Get yourself some real advice from a professional knowledgeable in the application of tax law to gambling income. If you get caught, the best that can happen is being required to pay back taxes embellished with penalties, interest, and fines. In the worst case, you go to the federal slammer for a while.

Re: Clarifications about Tax
 

thanks. unfortunately i have not made 10k in poker winnings this year. some people are saying i must declare anyways. i am confused.

Re: Clarifications about Tax
 

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thanks. unfortunately i have not made 10k in poker winnings this year. some people are saying i must declare anyways. i am confused.

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There is a certain threshold (I am not sure of the current number). If you made above that threshold you must file, and you must declare all income, including gambling income. If your total income is below that threshold, you do not have to file, although you can file to get a refund of any tax withheld. This is explained in the beginning of the tax form booklet.

Re: Clarifications about Tax
 

I'd like to thank everyone for the help that they have provided regarding this post. Take care all.

Re: Clarifications about Tax
 

haha, I dont pay taxes, US government will never know about me!!! LOLOLOLOL!!!! SUCKERS!!!

Re: Clarifications about Tax
 

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thanks. unfortunately i have not made 10k in poker winnings this year. some people are saying i must declare anyways. i am confused.

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There is a certain threshold (I am not sure of the current number). If you made above that threshold you must file, and you must declare all income, including gambling income. If your total income is below that threshold, you do not have to file, although you can file to get a refund of any tax withheld. This is explained in the beginning of the tax form booklet.

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I am not sure if this is the exemption you are speaking of, but I recall that there is a provision that says that 1.) if you are under a certain age (I believe 23 or so), and have earned under a certain amount in a tax year (~4350 or so), then you do not have to file. Please consult IRS literature on this to find out exactly what the deal is, but this loophole applied to me for FEDERAL (but not local) taxes several years ago when I was in college.

Re: Clarifications about Tax
 

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really? all cardrooms and casinos that aren't "indian" are 21+

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I specifically said non-tribal. I know of at least three 18-and-older cardrooms in my city alone. I work in one of them. So it's not federal law. I'd guess that if casinos elsewhere are 21+, it's either because of local/state laws or because they serve alcohol and don't want to go to the trouble of differentiating between customers who are okay to gamble but not drink and customers who are okay to do both. Kind of like strip clubs in some localities.

Re: Clarifications about Tax
 

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under what circumstances would the IRS look at my account? I am still a dependent, I barely have any net winnings and as far as official records go I have never held even a part time job.(i worked for my aunt for a summer)

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If you are subject to US tax laws, and if you have made $10,000 playing poker and you don't declare it and pay taxes on it, you are in violation of the law, period. Your age, dependency, other employment, the legality of your winnings, etc., etc., are irrelevant.

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You are incorrect, there is no $10,000 threshold.

Russel Fox already summed it up, take his advice only... ignore the advice of others in this thread. Russell is one of the foremost authorities on taxation for gamblers, Mr. Fox is a tax practitioner enrolled to practice before the Internal Revenue Service. You can read some of his essays at www.gambling-law-us.com

TT [img]/images/graemlins/club.gif[/img]