Taxes?

[flopdanutz]

How do (legally?) minimize the amount you pay for on taxes for your gambling winnings???

I do all my transactions through neteller then directly to my checking account.

what can I deduct for expenses? how do I show proof? how will the IRS know the info is accurate? Is there a wa to pay zero taxes? how does the IRS track income info? should I be withdrawing money via another form ie (mailed checks?) instead of neteller?

[lunchmeat]

According to "The McLaughlin Group" (which I believe is the funniest show on television) one of the reasons congress keeps trying to ban internet gambling is because there isn't yet a viable way to tax income gained from it. So from a pragmatic standpoint, as opposed to a legal or moral one, you'll probably be safe not reporting your poker winnings to the IRS. But if the urge to be a good citizen overwhelms you, the IRS has a specific form for gambling profits, the W-2G, which you probably can get from their website.

[tiltboy]

George says pay your taxes because he really could use the money.

[Ted Geisel]

The McLaughlin Group is not funnier than Vince Van Patten.

A US citizen/resident has to pay taxes on income from whatever source dervied, unless it is expressly excluded from rax. However, I doubt that any off-shore gaming company will report your winnings to the IRS, issue a W2-G or Form 1099, as none of them are US companies.

What you declare as income is your decision, you can comply with the law or not, but be aware that a steady streanm of bank deposits from overseas would be noticed if you were otherwise being audited. (It really won't make much difference if they ate direct deposits or checks.)

I think you can net your losses versus your wins, but refer you to the IRS publication available for download .... hopefully from a neutral, internet cafe site.

My advice is that, if you win, pay your taxes. It IS the law.

Ted "Not a Fed" Geisel

[Mike Haven]

ted - if mike sexton was paid, say, a $10,000,000 bonus for his part in their success and if he declared this income, would he have to pay tax while being arrested, or would the whole caboodle be confiscated?

[RiverMel]

Yes, the US government desperately needs money for the purposes of killing civilians in far off lands. It is a very expensive venture, you know.

[J.R.]

but be aware that a steady stream of bank deposits from overseas would be noticed if you were otherwise being audited. (It really won't make much difference if they ate direct deposits or checks.)

Why wouldn't you just cash the check, so there is no bank deposit (and hence an obvious record).

[Aragorn]

As for deducting expenses, the key is whether you are a professional player or an amateur. If you are a professional, you can fill out a schedule C and deduct legitimate expenses such as books, traveling to tournaments, etc. The rules for being a pro are complex and I am no expert, but I think some books aroound cover it.

If you are not a professional, you cannot deduct any expenses. You are supposed to report your net wins (total wins - total losses).

[Kurn, son of Mogh]

You are supposed to report your net wins (total wins - total losses).

And deducting losses is only possible if you itemize deductions.

[Prickly Pete]

True, but if you're doing well, you will soon have a mattress full of $.