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Old 12-26-2005, 05:04 AM
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Default Tax Question-about money in account not cashed out

Greetings,

I'm sure many of you are now becoming vigilant regarding tax questions as the new year approaches. I certainly have been feeling some (healthy) anxiety. I have a tax question for anybody with experience/expertise. This problem is faced by many I'm sure. Assume player 'X' has $1,000 in a PP account (or whatever amount of winnings). At what point is this money taxable? Is it taxable as the New Year rolls over simply because it's sitting there? Is it taxable at the point it's cashed out? Is it taxable the minute the check is cashed and hits your bank account? Is it taxable the minute it's won and hence if it's cashed out in 2006 it doesn't get taxed again? I guess the issue of double taxation is a concern. Any feedback would be greatly appreciated.

JeffreyREBT "Wherein I don't promise to make you rich without trying, or even trying very hard; I do promise to say things that will make you FEEL rich."
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Old 12-26-2005, 06:04 AM
Schwartzy61 Schwartzy61 is offline
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Default Re: Tax Question-about money in account not cashed out

It's taxable in the year it was earned/won.

It doesn't matter if you don't cash it out...
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Old 12-26-2005, 08:12 AM
Pog0 Pog0 is offline
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Default Re: Tax Question-about money in account not cashed out

The OP's worry is that he will report his account balance in his taxes and then will cash it out the following year.

The first year, he's reporting income that the IRS cannot see but the IRS is not complaining. The second year, he is not reporting money that can be traced raising suspicions with the IRS although that money was already accounted for the previous year.

The fear is that by doing the correct thing (reporting what's in your online account) he is more likely to get in trouble with the government than if he were to just report whatever leaves the internet.
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Old 12-26-2005, 08:45 AM
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Default Re: Tax Question-about money in account not cashed out

Thanks for the responses. Kind of having the last minute tax jitters. Actually drove to the casino today to get my winning/loss statement (couldn't believe they had these). Then the credit card statements, checking account history, CC receipts, fast cash slips, argh! The dates, amounts, witnesses, journals, etc. Of course, then the tax account will interrogate me and demand $500 or so.

Next year I'm going to do everything different. I have this hi-tech microphone/recorder that uses no tapes. This will function as my detailed journal and as a supplement to my paper journal. Next, I will use Pokertracker and create daily logs to back up my oral report. This will be combined with all the receipts mentioned above.

Staying compliant is a real pain. I feel like I have fallen into a great abyss of not-knowingness. I guess that's why I have a tax accountant. Sadly, all of my poker winnings have gone to medical bills. My last withdrawl paid for an MRI, 2 physical therapy sessions and 1 prescription. I guess it could be worse! It's just too bad we can't use deductions against gaming winnings. Sorry for rambling and to reiterate: thanks for the information.

JeffreyREBT "Wherein I don't promise to make you rich without trying, or even trying hard; I do promise to say things that will make you FEEL rich."
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