Taxes for pro Gamblers

What are professional gamblers in the US doing as far as taxes? How is everyone handling this? What has been done in the past and what is everyone's plan for this year? I assume most people who read this are winning poker players and maybe some sports betting (or blackjack?) pros. Any response will be helpful, but someone who's been doing for their entire source of income for a few years would be ideal.

[Easy E]

Reporting them?

[youtalkfunny]

This is my first year playing full-time (poker and sports), and I want to do everything by the book.

Is there anything I should be doing?

Keep in mind that I know nothing about taxes beyond the 1040EZ.

I don't know much, but am quite sure you should be playing estimated taxes at least quarterly rather than waiting until April 2006.

[Masquerade]

[ QUOTE ]
Reporting them?

[/ QUOTE ]

You're joking right? One of the most insane things about the taxation of poker players is that tourney winners are shafted by the casinos reporting the wins, but on an adjacent table someone could be winning pots many times greater with noone taking a cent.

[ QUOTE ]
[ QUOTE ]
Reporting them?

[/ QUOTE ]

You're joking right? One of the most insane things about the taxation of poker players is that tourney winners are shafted by the casinos reporting the wins, but on an adjacent table someone could be winning pots many times greater with noone taking a cent.

[/ QUOTE ]I doubt this is the fault of the casinos -- I don't expect they have any choice but to report the tournament winnings.

[MicroBob]

I agree that many should be doing the estimated quarterly taxes.


You should be keeping accurate daily records and you will want to file a schedule-C as a 'professional' gambler.

Although I suspect that in your first year as a 'pro' you could get away with filing as a recreational gambler ('other income' on a regular tax-form) if you really wanted to.
But if you do it this way then you don't get any deductions for 'business' expenses (new computer, poker books, even your internet costs).


Do a search in the internet-forum for more information.
This 'gambling tax' stuff is talked about ALL the freaking time.


There was a thread started by a poster named CPA in Feb or Mar I believe that was quite good and very informative.


Also: this is officially my 500th time recommending Gambler's Guide to Taxes by Walter L. Lewis.
It will give you a decent idea of what you should be doing (although it was written before the internet poker-boom...but you can figure out most of what applies to you).
The book is $12 or so I think and you should be able to order it at a Barnes & Noble (I just happened upon it on the shelves at B&N and was happy I did).


It's not the end-all-be-all of gambler-tax advice....but for those who have no clue what on earth they are supposed to do I think it is a pretty good start.

It's also handy to take a copy of it to your CPA or tax-preparer (if you choose to go to one for advice) because MANY of those guys may not be familiar with the concept of a 'professional' gambler being able to file a schedule-C like any other small-business type owner.
It's not their fault...they're just SO used to dealing with 70-year-old grandmothers who hit a slot-machine jackpot.

But if you have the Walter Lewis book with you then you can help steer him towards the stuff that applies to you and he will know that you really AREN'T making it up (saying "but I read on a poker-internet-forum that you can do it this way" certainly won't carry much weight with him...but having the book will)


these are just some suggestions...I have never gone to a CPA or anything like that. That doesn't mean I'm very knowledgeable though as my Dad is the one who prepares my taxes (he is much better at that sort of thing).


I say this to stem the inevitable tide of PM's asking me for tax-advice (I get at least 2 or 3 it seems after I make a post in a tax thread around here).
Mostly everything I know is in this post.
Asking me for tax advice is akin to asking a deaf person to tune your piano.

[Alex/Mugaaz]

I'm thinking of getting mine done this year due to complications, can someone give me an idea of avg cost? Past a cetain point I'll just go get the books and do it myself.

[bobbysteels]

so what exactly are the penalties for not reporting....