need advice from college students - Page 4

callmedonnie · #31 09-08-2005, 03:20 PM

I haven't read entire thread but I'm about halfway through it. Anyway, I was under the assumption that you wouldn't have to report your whole bankroll because that is not winnings. I think of it as overhead and capital. A company needs a certain amount of capital to operate. A poker player needs a certain bankroll. So the bankroll isn't earnings. It is capital for your business venture.

The way I see it you would only have to pay taxes on your income, kind of like when owner of a company pays himself a salary.

I know next to nothing about taxes. Please, if I'm an idiot tell me. But tell me why if possible.

pyroponic · #32 09-09-2005, 12:39 PM

You're playing $10/20 6-max, what do you have to bitch about [img]/images/graemlins/wink.gif[/img]

By the way I attend the most expensive public school in the country, I know how you feel.

pyroponic · #33 09-09-2005, 12:40 PM

Good lord $40k a year? Where the hell do you go to school? I feel good it only costs me $20...and it would suck to have to quit poker after making it this far.

TheHammer24 · #34 09-09-2005, 12:53 PM

Why is everyone so gung ho about taxes on this site? First of all, the IRS is not going to know about winnings that you keep on a poker site. They do not devote precious and valueable resources to investigate this deeply into someone who makes less than 40k a year. The cost vs reward is too small, it is simple economics. As a result, one could easily just keep the money in their account until after they graduate. Then when you withdrawal, you will have to report more money at one time, but it will not affect your FASFA.

Secondly, the IRS generally makes people simply pay the taxes they did not when they underreport by a small amount. You're not going to get thrown in jail or pay any substatial fine. If you get caught, you'll pay up, it's EV+ IMHO. Everyone, flips out everytime a post like this comes up. Maybe it's because they feel its unfair if they pay and someone else gets away with not paying it. But when it comes down to a college education, I think OP needs to find a way to avoid losing his grants.

dogmeat · #35 09-09-2005, 01:19 PM

[ QUOTE ]
True, but the IRS doesnt know the money exists. If he pays taxes in 2 years or whenever he cashes it out, everyone wins, so there's nothing wrong with this.

[/ QUOTE ]

So you are saying that if nobody knows about something, it is alright? Your girlfriend can cheat on you, so long as you don't find out - so there is nothing worng with this?

Your logic if totally flawed here. That said, I think the majority of the players that are actively paying taxes on their online poker earnings do so on only what they pull out that actually hits Neteller or their bank account.

Dogmeat [img]/images/graemlins/spade.gif[/img]

juris · #36 09-09-2005, 02:04 PM

[ QUOTE ]
Why is everyone so gung ho about taxes on this site? First of all, the IRS is not going to know about winnings that you keep on a poker site. They do not devote precious and valueable resources to investigate this deeply into someone who makes less than 40k a year. The cost vs reward is too small, it is simple economics. As a result, one could easily just keep the money in their account until after they graduate. Then when you withdrawal, you will have to report more money at one time, but it will not affect your FASFA.

Secondly, the IRS generally makes people simply pay the taxes they did not when they underreport by a small amount. You're not going to get thrown in jail or pay any substatial fine. If you get caught, you'll pay up, it's EV+ IMHO. Everyone, flips out everytime a post like this comes up. Maybe it's because they feel its unfair if they pay and someone else gets away with not paying it. But when it comes down to a college education, I think OP needs to find a way to avoid losing his grants.

[/ QUOTE ]

I am going to say this as kindly as I can. First, any income you generate, including online poker, is earned income. It is thus reportable.

Second, records do in fact exist of your gains and losses. Check your history on any poker site, and you'll see it there clearly.

Third, the penalties are HUGE. They can be negotiated down, but that will require a lawyer (and no I'm not offering my services, I'm not an experienced enough tax lawyer) and you will pay.

If you were referring to $500 in poker winnings, you're probably right. If you're talking about $20K, you are seriously wrong. There is a law that allows one to report gambling winnings without fear of penalty, even if they were online.

Finally, there are people in the government trying to put the noose on online gambling. They will use the tax code-think Al Capone. Some will get away clean, true. Some will decide to take the risk, true again. But to give carte blance advice not to worry is beyond misinformed and doesn't due squat for someone trying to assess the risk.

TheHammer24 · #37 09-10-2005, 12:58 AM

[ QUOTE ]

I am going to say this as kindly as I can. First, any income you generate, including online poker, is earned income. It is thus reportable.

[/ QUOTE ]
Didn't dispute this
[ QUOTE ]

Second, records do in fact exist of your gains and losses. Check your history on any poker site, and you'll see it there clearly.

[/ QUOTE ]

Party Poker, based in Gilbatrar, is going to be real quick to offer one its customer's records to a Government that has no authority over it, and is in fact, trying to eliminate it entirely within the US.

[ QUOTE ]

Third, the penalties are HUGE. They can be negotiated down, but that will require a lawyer.

[/ QUOTE ]
You can negociate them down to what you underreported plus interest.

[ QUOTE ]

Finally, there are people in the government trying to put the noose on online gambling. They will use the tax code-think Al Capone. Some will get away clean, true. Some will decide to take the risk, true again. But to give carte blance advice not to worry is beyond misinformed and doesn't due squat for someone trying to assess the risk.

[/ QUOTE ]
Yeah because online poker playing college students trying to pay tuition online basically equals Al Capone. The advice I gave was the oppisite of what you just said. It did tell the other side of the risk. If OP wanted to pay and declare everything to IRA and FASFA then there would be no risk at all. It's up to him to decide.

ggbman · #38 09-10-2005, 01:46 AM

[ QUOTE ]
[ QUOTE ]
True, but the IRS doesnt know the money exists. If he pays taxes in 2 years or whenever he cashes it out, everyone wins, so there's nothing wrong with this.

[/ QUOTE ]

That analogy is ridiculous to say the least. If he pays taxes on it when he cashes it out, the government gets to get their cut just before, but he doesnt loose his finacnical aid.
So you are saying that if nobody knows about something, it is alright? Your girlfriend can cheat on you, so long as you don't find out - so there is nothing worng with this?

Your logic if totally flawed here. That said, I think the majority of the players that are actively paying taxes on their online poker earnings do so on only what they pull out that actually hits Neteller or their bank account.

Dogmeat [img]/images/graemlins/spade.gif[/img]

[/ QUOTE ]

froggy527 · #39 09-10-2005, 03:10 AM

It never ceases to amaze me the number of people on
this site, who almost gleefully give advise that runs
from shady to downright illeagal! " What they gov/irs don't
know won't hurt you!" Is the favorite. People get into
trouble everyday because they think that the IRS is stupid.

[ QUOTE ]
Finally, there are people in the government trying to put the noose on online gambling

[/ QUOTE ]

And the more people that they think are trying to beat the
system will give them more of a reason to crack down!

[ QUOTE ]
Party Poker, based in Gilbatrar, is going to be real quick to offer one its customer's records to a Government that has no authority over it

[/ QUOTE ]

Okay say this happens! The US Attorney General goes to Party
and all of the other poker sites and tells them this is how it's going to be! "Either you give us records on request or
we will pull a China on you, and throw up firewalls monitor
isp's and do everything we can to stop internet gambling"
Thus cutting out 80%-90%? Of your player base."

Since this would put most sites out of buisness. How many
of them do you think will say no?

TheHammer24 · #40 09-10-2005, 11:37 AM

[ QUOTE ]

Okay say this happens! The US Attorney General goes to Party
and all of the other poker sites and tells them this is how it's going to be! "Either you give us records on request or
we will pull a China on you, and throw up firewalls monitor
isp's and do everything we can to stop internet gambling"
Thus cutting out 80%-90%? Of your player base."

Since this would put most sites out of buisness. How many
of them do you think will say no?

[/ QUOTE ]

This statement is ridiculous. The United States will never, nor are the legally allowed, firewall anything from it's citizens. The PRC and USA are quite different you know.

I personally pay my taxes on my poker winnings, but I think it is fair for the OP to get opinion from the otherside so he can truly asses the risk. If abunch of whistling blowing posters come in and simply preech pay your taxes pay your taxes, report to FASFA, OP will have to quit playing poker and jeopardize his college education. He may believe that taking the risk of omitting his poker income on his FASFA return will have more return more often, and thus, take the chance. We're EV guys here. Sure, you risk punishment, but it may still be worth it!