Question on paying taxes on poker winnings.

[h_ven]

The last two weeks I've cahsed out $10,000. I won a $35,000 R&A and paradise and cashed some money out from the Empire500 deal. What do I do about paying taxes on these. I've talked to several people, some say I can get away with it since paradise is in another country, and some say I have to up to 40%. Please give me some comments.

[ChicagoTroy]

Talk to an accountant.

I like the idea that you don't have to pay taxes because the site is hosted in another country, that's a howler.

[Stefan Prodan]

What's a R&A?

[ZeeJustin]

Regardless of what country Paradise is in, as a US citizen, you are legally and morally required to pay taxes on your winnings.

[Kevroc]

rebuys and add-ons

[pzhon]

You should talk to an accountant ASAP. Mine says he helps many clients declare gambling winnings. If you put this off until next year, I believe you may face underwithholding penalties.

[bvaughn]

Here's my thought: the pain and agony of paying taxes on my poker winnings PALES in comparison to the pain and agony I (and my family) will feel if the IRS chooses to audit and I get caught not reporting my winnings.

[Kurn, son of Mogh]

Your poker winnings are "ordinary income" to the IRS, so it's no different than any other money you earn from a job (in other words it is *not* a capital gain) and since you cashed out $10,000, your bank will report that transaction to the IRS.

Like any other income, the amount you pay in taxes will depend on your total income and deductions.

Call a tax accountant.

[Kurn, son of Mogh]

you are legally and morally required to pay taxes

Legally, yes. "morally" is debatable.

[Ficus]

Kurn,

A bit of history is in order. Once upon a time, there was a breed of warriors known as Vikings. What a Viking could defend was what he was able to own. Even the leader of a Viking band needed a trusted companion to watch his back while he relieved himself, lest someone take his position (and possessions) through assassination.

In modern-day America, we have the police and courts to enforce laws which guarantee property rights. We have the military to protect the country and its laws from external threats. None of the things you have or the money you make would mean anything if you were without these protections. Taxes are the price we pay for these protections (as well as other public services and benefits), and by being an American, you have agreed to hold up your end of the deal. You have already accepted the benefits of this social contract, thus you have a moral obligation to meet its terms, as concisely detailed in the U.S. tax code.

Perhaps you don't feel a moral obligation to pay taxes which will fund programs that you oppose or will not benefit from directly. However, they are part of the social contract, as negotiated by your representatives in Congress and your state legislature and your town council. When the contract finally reaches you, it is strictly an all-or-nothing deal, which is just the way it works.