Another Tax Thread on Online Winnings

[Wake up CALL]

Yes I get paid by check from Party and they are issued on a Florida Bank. The 2nd part of your question does not matter since you should file your taxes correctly.

[Redhotman]

[ QUOTE ]
Yes I get paid by check from Party and they are issued on a Florida Bank. The 2nd part of your question does not matter since you should file your taxes correctly.


[/ QUOTE ]
was that the eleventh commandment, thou shalt give the government 1/3 of his money so it can squander it.

[MicroBob]

at the B&M casino where i work, they have a set time that officially constitutes the beginning of each IRS-day. it's 4 a.m. where i am...this is for purposes of high-rollers who may have to report.

i BELIEVE that if you play from 5a-8a, take a nap in your hotel room, play again from 1p-5p, go have dinner and catch a show, and play again from 11p-3a it all counts under the same session-day.
this, however, could be very wrong though BUT it is play within the same 24-hour period.

if this is true, and i am actually correct for once in my life, then i think you would be best advised to just count all play online between midnight-to-midnight each day as a single session.
this falls under the category of at least ATTEMPTING to do the right thing in case the IRS comes after you, as was mentioned previously.

i would think that playing a series of SNG's can count as a session and doesnt need to count as one tournament at a time....but maybe i'm too liberal in my interpretation.

keep accurate daily records and hopefully all will be okay!!!

i bought two copies of the book Gambler's Guide to Taxes by Walter L. Lewis which includes several articles by I Nelson Rose. one copy for me and one for my Dad in florida who works part-time at HR Block even in his retired days and also does my taxes (on the other hand, i know virtually nothing on the subject).
the book is not too detailed...and it doesnt deal specifically with online-gambling but it should give you a decent footing and may have answers to some of your questions.
according to teh book, and many posters on here including me, it is well worth considering filing as a professional gambler and taking advantage of all the deductions that go with it.
there were also a coupleof examples where the gambler in question was given the benefit of the doubt because they kept accurate records...even of wins that weren't reported by the casino to the IRS. in other words, they didnt just try to claim the lsoses, they appeared to be most forthcoming in regards to all their winnings as well.

i picked up my copies at a Barnes and Noble store in the games section.

the gambling-tax stuff that my dad typially deals with are from people who hit a decent sized slot jackpot in biloxi or are make regular junkets.
the professional gambler stuff is news to him..but since it works just like running a small-business it becomes a breeze.

i waited until after jan 1 to purchase my new laptop because of the likelihood i will be filing as a professional gambler in april, 2005 (i didnt have enough play nor did i win or lose enough this year to really make a difference). if i do file as a pro then i can deduct the cost of the laptop because internet-poker will be it's primary function and i will hopefully be playing 30-40+ hours a week. can also deduct cost of phone-line for internet connection, cost of isp, travel expenses to B&M play, cost of business cards promoting myself as an affiliate...etc etc.
this is the general plan anyway.....but if i keep getting rivered over and over i may actually have to keep my REAL job. oh well.

anybody with more knowledge than me (everyone???) may feel free to offer their corrections where they believe i have strayed too far from reality.

[KidParty]

The casino day is a 24 hour day which is different in different casinos. It is put in place to catch people who are laundering money not for tax reasons. And I hope you are not in any supervisory position because if I were to tell people what the casino day is at the casino where I work I would be immediatly fired. The law would say you are helping people circumvent the Title 31 laws which is a pretty bid deal too.

[TwoGun]

I am not sure why it matters about a session. I am no tax expert, but there is no 2% rule on itemized deductions for gambling winnings.

If you net 60k playing poker, if you won 160k an dlost 100k, or won 80k and lost 10k- it's the same tax liability).

In terms of red flag...I just would fill it out as accuratley as possible and pray they leave you alone.

[KidParty]

The 24 hour day only has to do with amounts over $10,000 which is total cash in(real currency for chips) or cash out (chips for currency) but not both added together. If you are paid with a check Title 31 forms don't have to be done.

[MicroBob]

cool. thanks for the clarification.
no, i'm not in any supervisory position, i am merely a lowly dealer.....and you may also note that i am reasonably anonymous on these boards and do not mention which specific casino i work at.
but thanks for the warning though...point taken.

[KidParty]

I didn't mean to sound like I was talking daown to ya...I go back and for between dealer and supervior positions all the time...Trust me there are no lowly dealers just lowly supervisors...keep dealing...Plus i do know if a dealer would say what you said he/she would be in trouble too. And you are right you didn't say what casino but some of the people at your casino my know your handle here and cause a stir anyway...You have to remember casinos are VERY paranoid about anything and everything, stay around them long enough and they will drive you nuts.

[Kurn, son of Mogh]

Banks are not required to report transactions under $10,000. The IRS has finite resources. They cannot check every transaction in every bank account in the country, nor do banks have the resources to proactively provide such reports.

There will be a paper trail *if* somebody looks. The question you must ask yourself is "what is the probability someone will look?"

[Kurn, son of Mogh]

was that the eleventh commandment, thou shalt give the government 1/3 of his money

The gist of the problem here is the IRS not permitting you to consider poker (as a 2nd income) as a small business and report your profit/loss on schedule C. If that were allowed I would have no argument other than my normal anti-tax rant.

The way it works now, if you play at low-middle limits and rent (so you likely can't itemize), you could end up owing a good chunk of your profit for the year as taxes.

Say you ended up the year $5,000 ahead. Not a great year, because your winning sessions totalled $15,000 and your losing sessions totalled $10,000. Most people who don't own property can only find a couple of thousand dollars to throw on schedule A, so let's call your other deductions $2,000. That means $12,000 in deductions, or $5,400 over the standard deduction. That means that even though you only won $5,000 playing poker, you're going to be taxed on $9,600 additional income, or about $4,000 in taxes.

Now if you just say "screw the rules" and report the net, you'll only pay about $1,500 on that additional income.

So by being a good citizen and obeying the rules, you forfeit an additional 50% of your yearly net profit.