Who Pays Taxes on Poker Earnings? (POLL)

[ QUOTE ]

In Ohio and perhaps a few other States, yes. Most States however do not compute your taxes in this manner. Several have zero State income tax. My State has a 6.5% cap for the highest rate but it is computed on my 1040 amount after my itemized deductions so this method has no additional adverse effect on me.

[/ QUOTE ]

So I guess there are some states where you can not net enough profits to pay for the taxes on on your gross?!? How horrible! Does anyone know if Illinois is one of those states?

[somapopper]

Anyone expecting any guidance in the near future from the IRS on this? Given the questionable legality of online poker anyway, and the realitive lack of action on the IRS's part here, I've always assumed that the IRS and the government in general would clarify their position. Hopefully, in the form of a federal law defacto legalizes internet gambling and lays out a clearer taxation policy.

I think it's totally ridiculous to expect some college student to report 1.5 grand of poker income over the course of a year (just as very few folks report marginal winnings at the slots). But at the same time, someone making 100k+ clearly needs to report it as income, and hopefully have it taxed as normal income would be.

[k_squared]

you have to report ANY income you recieve... In the case of gambing income the IRS is very clear that any winnings are supposed to be reported and depending onwhether you file as a professional or a recreational player you have to do different things.

There is no minimum amount you have to win before you report your winnings. In fact, as far as the IRS is concerned you should be reporting even if you are a break even player.

There are plenty of resources out there to learn more about these questions. Just do a search and look for a book on taxes and gambling income.

-K_squared

[Mempho]

[ QUOTE ]
Anyone expecting any guidance in the near future from the IRS on this? Given the questionable legality of online poker anyway, and the realitive lack of action on the IRS's part here, I've always assumed that the IRS and the government in general would clarify their position. Hopefully, in the form of a federal law defacto legalizes internet gambling and lays out a clearer taxation policy.

I think it's totally ridiculous to expect some college student to report 1.5 grand of poker income over the course of a year (just as very few folks report marginal winnings at the slots). But at the same time, someone making 100k+ clearly needs to report it as income, and hopefully have it taxed as normal income would be.

[/ QUOTE ]

The IRS doesn't care. You can write "drug dealer" in the occupation space and they really don't care. They just want their part, whether the income is legal or illegal...meaning that the government doesn't have to clarify anything concerning it's legality. The IRS has already clarified their position that they can tax it, however.