Pay Taxes on Earnings?

[EvoLoN]

Hey guys, I hope i'm posting this in the right forum and if i am not i apologize in advance. Someone told me that if you make over 500 dollars playing online poker you have to pay taxes on the earnings you make? Is this true, and if so, do people have any way of getting around it?

[BusterStacks]

Good question, I don't think this has ever been brought up before. Maybe try doing a search though, let me know what you find!

[Overdrive]

[ QUOTE ]
Hey guys, I hope i'm posting this in the right forum and if i am not i apologize in advance. Someone told me that if you make over 500 dollars playing online poker you have to pay taxes on the earnings you make? Is this true, and if so, do people have any way of getting around it?

[/ QUOTE ]

If you live in the US, you are supposed to pay taxes on all gambling winnings. The US is one of the few industrialized contries that require taxes to be paid on gambling winnings. Canada, Great Britian and other civilized countries do not tax gambling winnings. Read all about your tax obligations at http://www.irs.gov

[niwotyalpi]

Bump....

I'd like to hear some thought on this from some of the online pro's we have on this site. I know there are quite a few here.

[BBill]

Lets say for the sake of discussion I won 300.00 playing online poker in 2004 and I live in the usa, but also lets say I collected $1500.00 in poker site deposit bonuses.
Would taxes be owed on 300 and the 1500? or just the 300. I don't consider bonus money to be won, I consider it to be money "not lost".
Of course this could be a grey area, I doubt us tax laws define money earned while bonus whoring.

[Benholio]

[ QUOTE ]
Lets say for the sake of discussion I won 300.00 playing online poker in 2004 and I live in the usa, but also lets say I collected $1500.00 in poker site deposit bonuses.
Would taxes be owed on 300 and the 1500? or just the 300. I don't consider bonus money to be won, I consider it to be money "not lost".
Of course this could be a grey area, I doubt us tax laws define money earned while bonus whoring.

[/ QUOTE ]

Doesn't really matter whether you consider the money "won", it is still income. You can search here and find half a dozen long posts about internet poker and taxes, but I have a feeling we will have a lot better idea what the boundaries are whenever a few 2p2 regulars get audited. I wouldn't wish an audit on anyone, but it will be educational for all of us assuming it gets posted publicly here.

[Wahoo91]

It is very clear that all poker income whether from "winning" or "bonuses" are all taxable in the US in the year earned. There is no question about this. In addition it does not matter if you "take out" the money from the poker site. If the money is in your account and you have the ability to transfer this money to other accounts you have earned this money.

In addition, there is no limit (e.g. your $500 example). All gambling winnings, net of losses, are taxable (e.g. your net increase for the year).

Do not make a mistake thinking you do not owe taxes on this money.

Whether you report or not is up to you. I am still deciding how I will handle my net increase this year.