Who Pays Taxes on Poker Earnings? (POLL)

[Mempho]

[ QUOTE ]
[ QUOTE ]
Until there's a change, the law is the law, imo.

[/ QUOTE ]
All of these arguments seem pretty irrelivent. It just comes down to is the Probability of getting cought times the punishment worth more then the money you would save from not paying. For internet as it may be traceable this may be the case for many people. For occational live play one would need an increadible risk aversion level for this to be the case.
If you get utility from paying your taxes fine factor that in, but many dont.

[/ QUOTE ]

What about honesty? What if you knew that there was a 99.99999% chance that you wouldn't get caught and you just pay for moral/ethical reasons?

That said, I still far exceed the speed limit on our nation's highways.

[Piers]

Your poll might be meningfull if you made nationality distinctions. I suspect most of the people who don't pay tax are doing so because they don't have to.

[Luv2DriveTT]

[ QUOTE ]
bad form.

[/ QUOTE ]

not really, this was the advice I was given by my CPA. Essentially if I pay taxes on everything that is reportable. Live cash & carry income for me is less than 10K, hence I don't report it. I see your point and technically your correct, but I'm just living by the IRS guidelines for gambling income. They know this is a big gaping hole in the tax code, if I was depositing my live play winnings then this would of course be a different situation.

TT [img]/images/graemlins/club.gif[/img]

[JS0085]

I have been playing online recreationally for a while now, and reported my meager winnings (several thousands) the past 2 years using the obviously incorrect method of deducting my deposits from my withdrawals. This year has been a much better year and I intend to meet my tax obligations in full. However, I am not much of a record keeper. Aside from keeping records in the future, what can I do about reporting my winnings from earlier this year? Should I estimate winning sessions and losings sessions.

This is a very helpful thread, and I appreciate any comments.

Later

[BottlesOf]

[ QUOTE ]
I see your point and technically your correct, but I'm just living by the IRS guidelines for gambling income.

[/ QUOTE ]

No you don't. Either you are not living by the IRS guidelines (and I maintain my original reply if this is the case) or I don't understand the guidelines.

Can you explain how your under 10K cash and carry whatever is not taxable income?

[BottlesOf]

[ QUOTE ]
It just comes down to is the Probability of getting cought times the punishment worth more then the money you would save from not paying.

[/ QUOTE ]

No it doesn't. IMO, this is not a simple EV calculation.

[MrMoo]

[ QUOTE ]
What about honesty? What if you knew that there was a 99.99999% chance that you wouldn't get caught and you just pay for moral/ethical reasons?

That said, I still far exceed the speed limit on our nation's highways.

[/ QUOTE ]

It's hard for me to be honest when I feel the IRS isn't being "fair". I understand online gambling is fairly new. However, I personally feel it would be the IRS's best interests to make it as easy as possibly to pay taxes on my gambling income. Instead, I'm forced to decide what I "think" is a session, made to vastly increase my gross income even though I my net income hasn't increased, and sent to jail or heavily fined if I get it wrong.

[ISF]

[ QUOTE ]

No it doesn't. IMO, this is not a simple EV calculation

[/ QUOTE ]
I am ment to imply its a Utility Maixmization(i.e factor in non monetary penalties) , and every decision should be. I really dont understand what there is to disagree with. In my last sentence I allow for the possibility that you get utility from following the tax law correctly/not lying on your tax return many/most dont.

[Mempho]

[ QUOTE ]
I have been playing online recreationally for a while now, and reported my meager winnings (several thousands) the past 2 years using the obviously incorrect method of deducting my deposits from my withdrawals. This year has been a much better year and I intend to meet my tax obligations in full. However, I am not much of a record keeper. Aside from keeping records in the future, what can I do about reporting my winnings from earlier this year? Should I estimate winning sessions and losings sessions.

This is a very helpful thread, and I appreciate any comments.

Later

[/ QUOTE ]

I wouldn't lose any sleep over this, especially if the amount was small. Now that you're making more, I would make an attempt to rectify the situation and start reporting correctly. If you have pokertracker, you can do that with the script mentioned and linked to above. If you don't (and you have no records), I would invest in StatKing and I would make an attempt to figure it our for this year. If there is no way that you can do that, I would simply report your net. Get a good tax person this year and get that person to help you make the best attempt you can (Hint: go to a good local CPA).

[Python49]

lol I can see the situation now. The gov't will see that I filed taxes this year and see some huge AGI that never existed before and notice that I don't have a job and am 19 years old. They will then see this huge amount for a deduction and audit my ass so quick I won't even have time to load up pokertracker. But anyway... that chart someone linked me to about being able to deduct state expenses or whatever... even if you are making 90k AGI for the year the deduction for my state was only around 656... unless i'm supposed to haev a different # of exemptions than 1.. i don't even know what exemptions are.

This seems like such a big headache... i feel as though if i start reporting now my % chance to get audited goes up, and if that were to happen at this point i've got money that I havent been keeping records for... wtf do i do about that? Just start filing and get audited? Alot of the money I made when just starting out in poker a long time ago was from a few nice finishes in step 5 mini steps.. a win on an MTT.. and a buncha SNGs... and poker tracker does'nt even track this accurately unless you're importing the tournament HHs which I wasn't doing at the time.

If i were to just report my profits up to this point and then start keeping records from here on out I wonder if that would be fine...