Online Poker Taxes

[djcolts]

Online Poker Taxes FAQ

I started playing online in late May. I'm about a break-even player/small winner. However, I saw this link yesterday and I'm frightened to death that even as a small-time poker player (playing .5/1 and 10+1 SNGs), that if play enough (note not WIN enough, but PLAY enough), that with the way the laws are right now, I could lose the ability to contribute to my Roth IRA and/or lose my mortgage interest deduction even if I break even on my online poker. Can someone with much more experience enlighten me on this? Thank you.

[tommy300]

I am also very interested in hearing any advice/what people have done in the past with this.

[aquifex harse]

This could be a serious issue for alot of posters on this site. I'd be interested to know how the law stands in the UK

[CountDuckula]

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This could be a serious issue for alot of posters on this site. I'd be interested to know how the law stands in the UK

[/ QUOTE ]

My understanding is that the UK does not consider gambling winnings to be taxable income.

-Mike

[Cptkernow]

Poker winnings are tax free in the UK and winnings from poker do not count in anyway towards taxable income totals.

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[Kurn, son of Mogh]

Yeah, we here in the US may have much lower tax rates, but we have much more draconian tax-law enforcement. [img]/images/graemlins/frown.gif[/img]

[Mackas]

Poker winnings aren't taxable here in the UK according to the advice I've been given.

Nevertheless you should keep a record of all your withdrawals with vouching documents or records (neteller statements, copy cheques, individual sites statements etc). That way you can prove each such deposit into your bank account is non work or business related to the taxman's satisfaction if he inquires.

This might not apply as much to people in ordinary employment but if you run your own business or do anything that might entail a visit from the taxman you need to be able to prove your poker winnings are just that. Otherwise if you can't explain the deposits to his satisfaction you could end up getting hit with tax on non-taxable income cos you were too lazy to keep records. Now that would be a bad beat.

[AliasMrJones]

My personal view with regard to how I play is it's all one big session baby.

Unfortunately, the IRS specifically disallows this view and specifically requires reporting by session (and not by deposits/withdrawals).

[Kurn, son of Mogh]

Go to a tax accountant and ask.

Here's the question you must ask yourself. If I am audited, where's the paper trail? Remember, the online sites are not reporting anything to the IRS, but your bank might report regular a regular influx of cash.

One poster in another thread mentioned that an accountant had advised him to use deposits at poker sites as losses and withdrawals as wins. I can't vouch for either the veracity of the post or if the IRS would accept that.

If all you do is play at a B&M poker room, well, it's all cash and there's zero paper trail. The internet however, changes all that.

[solring]

How do people count bonuses from poker sites and online casinos?