paying taxes on online winnings

[allinadam]

Does anyone know at what rate the federal government taxes online poker winnings?

[RicktheRuler]

Sorry bud. Everyone is going to tell you to use the search function.

[Gregg777]

It's simply personal income. It depends on what your overall income is.

For example, if poker is your only income and you make $20,000, you will pay x amount. But if you make $80,000 a year at your regular job, and earn another $20,000 playing poker, you will pay more taxes on your poker winnings because you are in a higher bracket.

Also, you will have to pay for Social Security, which is roughly an extra 15%.

Say you make 60,000 a year, you will be paying roughly 40% in taxes: 25% for income, 15% for SS.

It all depends on your personal circumstances though.

[Niediam]

You don't have to pay the self-employment taxes unless you file as a professional.

[Gregg777]

Thanks for the info on the SS [img]/images/graemlins/cool.gif[/img]

My CPA got it wrong then, but they may have been confused because I have both regular employment income and self employment income from other sources.

[AaronBrown]

Gregg777 and Niediam gave you excellent answers. You should also remember that gambling losses are deductible against gambling winnings (you can't claim a net gambling loss). If you do other gambling, including office pools, horse racing or lottery; be sure to keep a journal of your expenses (other evidence, like tickets, is nice, but doesn't prove anything because anyone can pick up losing tickets).

Also, consider whether to call this a business. If it is you get hit for self-employment tax, plus maybe local business taxes. But you can deduct expenses associated with the activity.

[Dissident]

IF i bought into for a $100 and cash out a $100 that isnt income. Do I get taxed?

[WhiteWolf]

Lots of info on this site here

[Niediam]

Lets say you bought in for $100. Won $100. Then lost $100. Decided to give up and cash out your $100...

You have $100 in income which legally must be declared. You also have $100 in gambling loses which can be deducted (up to the amount of gambling income) but only if you itemize your deductions.

[Schwartzy61]

That's definitely not how it works.

If you sit down for one session whatever you have at the end will be your result.

So if you sit down and buy in for $100 and a half hour into it you are up $100, but lose that $100 over the next 3 hours, and wind up cashing out only your $100 buy-in your net result is $0.

So whatever your net result is at the end of a session is what your income or loss will be reported as for that session no matter how much you were up or down at any point during that session.

What defines a "session" is where the real questions are.