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Old 08-22-2005, 09:33 AM
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Default Re: Do bonuses affect taxes? (US)

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All income is taxable, like someone else said, including drug sales. Remember how they got Capone? He didn't pay income tax on the money he made from his illegal businesses.

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While everything you say here is correct, there is ambiguity in regards to bonuses. A bonus may or may not be considered income. Rebates (i.e. buy a computer for $800 and get $150 via rebates) are not considered income. An argument could be made that rakeback and bonuses are simply rebates against your "fee" for playing. If this argument were to pass muster, bonuses and rakeback would not be taxable.

Unless you get audited, I doubt you will get a clear answer on the proper classification of these items. And even then, each IRS agent could easily interpret them differently. So you have to determine whether you want to play it safe (pay taxes on all rakeback and bonuses) or take a chance.

Acme

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I agree that there could be an argument made in terms of rakeback and your rebate example. The reason a rebate is not income is because they are just giving you part of your money back, it isn't income. I suppose you could use this same argument for rakeback. It doesn't fly with a bonus however. The bonus money was never part of your money in the first place so it cannot be a rebate. If the bonus was "by $100 in chips and if you go broke we'll give you $25 back" then it would be a rebate. The bonus, however, is yours if you win or lose--as long as you meet the WR.
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