#11
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Re: Do bonuses affect taxes? (US)
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Are there any cases of a person getting in trouble for not reporting bonuses? What if you don't report anything at all? How much money can I accumulate before I have to worry about reporting it? [/ QUOTE ] My guess is anywhere from $1000-$9999999999999999999999999 |
#12
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Re: Do bonuses affect taxes? (US)
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Are there any cases of a person getting in trouble for not reporting bonuses? What if you don't report anything at all? How much money can I accumulate before I have to worry about reporting it? [/ QUOTE ] $1 Income derived from any source is taxable. Bribes, drug sales, etc. are taxable. So yes your internet bonuses are taxable income. It's hard to argue that they are gifts when you have to play a specified number of hands to claim the bonus. |
#13
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Re: Do bonuses affect taxes? (US)
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BONUSES ARE A GIFT! you can accept as of 2004, 11,000 a year tax free thats what I am claiming them as [img]/images/graemlins/grin.gif[/img] [/ QUOTE ] You obviously know nothing -- I mean absolutely *nothing* -- about the tax laws that govern gifts. Acme |
#14
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Re: Do bonuses affect taxes? (US)
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[ QUOTE ] BONUSES ARE A GIFT! you can accept as of 2004, 11,000 a year tax free thats what I am claiming them as [img]/images/graemlins/grin.gif[/img] [/ QUOTE ] You obviously know nothing -- I mean absolutely *nothing* -- about the tax laws that govern gifts. Acme [/ QUOTE ]will then enlighten us Mr Lawyer Accountant IRS man |
#15
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Re: Do bonuses affect taxes? (US)
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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#16
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Re: Do bonuses affect taxes? (US)
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[ QUOTE ] [ QUOTE ] BONUSES ARE A GIFT! you can accept as of 2004, 11,000 a year tax free thats what I am claiming them as [img]/images/graemlins/grin.gif[/img] [/ QUOTE ] You obviously know nothing -- I mean absolutely *nothing* -- about the tax laws that govern gifts. Acme [/ QUOTE ]will then enlighten us Mr Lawyer Accountant IRS man [/ QUOTE ] The *recipient* of a gift is never required to pay any taxes on said gift. Bill Gates could walk up to you and write you a check for $100,000,000 and you would not owe any taxes on the money. The *giver* has to worry about the tax implications. Also, bonuses may or may not be taxable, but they are definitely NOT gifts. Acme |
#17
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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. [/ QUOTE ] 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 |
#18
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Re: Do bonuses affect taxes? (US)
I don't think there is any ambiguity as far as rakeback goes.
Player wins $10,000 in some period of time, but pays $5000 in rake, leaving him actually ahead $5000. Rakeback gives him back $1250 of it, leaving him with $6250 ahead. Does he want to pay taxes on the full $10,000 he won? No, he wants to deduct the rake. So he will only be able to deduct (5000 - 1250), or $3750. Either the $1250 goes on top of his earnings, giving him 11250 - 5000 = 6250, or it is considered a return of part of his fees for using the site, giving him 10000 - 3750 = 6250. He made the same amount no matter how you look at the rakeback. |
#19
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Re: Do bonuses affect taxes? (US)
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I don't think there is any ambiguity as far as rakeback goes. Player wins $10,000 in some period of time, but pays $5000 in rake, leaving him actually ahead $5000. Rakeback gives him back $1250 of it, leaving him with $6250 ahead. Does he want to pay taxes on the full $10,000 he won? No, he wants to deduct the rake. So he will only be able to deduct (5000 - 1250), or $3750. Either the $1250 goes on top of his earnings, giving him 11250 - 5000 = 6250, or it is considered a return of part of his fees for using the site, giving him 10000 - 3750 = 6250. He made the same amount no matter how you look at the rakeback. [/ QUOTE ] Well written. I agree with your view. And I think it extends to the bonuses as well since they are, effectively, another form of rakeback. I've always paid taxes on my bonuses and rakeback because it seemed like they were different from true rebates. But I had never quite put it together this clearly. Thanks for the reply. Acme |
#20
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Re: Do bonuses affect taxes? (US)
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[ QUOTE ] I don't think there is any ambiguity as far as rakeback goes. Player wins $10,000 in some period of time, but pays $5000 in rake, leaving him actually ahead $5000. Rakeback gives him back $1250 of it, leaving him with $6250 ahead. Does he want to pay taxes on the full $10,000 he won? No, he wants to deduct the rake. So he will only be able to deduct (5000 - 1250), or $3750. Either the $1250 goes on top of his earnings, giving him 11250 - 5000 = 6250, or it is considered a return of part of his fees for using the site, giving him 10000 - 3750 = 6250. He made the same amount no matter how you look at the rakeback. [/ QUOTE ] Well written. I agree with your view. And I think it extends to the bonuses as well since they are, effectively, another form of rakeback. I've always paid taxes on my bonuses and rakeback because it seemed like they were different from true rebates. But I had never quite put it together this clearly. Thanks for the reply. Acme [/ QUOTE ] When you report this gambling income, be it winnings or rebates or whatever, do you fill out form W2-G and fill in Party Poker and all their info? Do you fill out forms for each poker site? |
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