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General Poker Discussion >> Poker Legislation

Pages: 1
onlinebeginner
Pooh-Bah


Reged: 12/05/06
Posts: 1780
When does the tax man cometh? (USA)
      #13174260 - 11/29/07 04:52 PM

When are your poker winnings recorded so that you are forced to pay taxes on them? Only in multi table tourneys and bad beat jackpots?

I assume the laws differ from state to state....

three states I am in most often are Connecticut, Louisianna and Florida

thanx for the help


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Small Fry
old hand


Reged: 09/26/06
Posts: 761
Loc: Livermore, CA
Re: When does the tax man cometh? (USA) [Re: onlinebeginner]
      #13174521 - 11/29/07 05:07 PM

You will need to net wins against losses. This might be done by session, day or possibly week. Most likely reporting gambling winnings as misc. income and reporting the losses on Schedule A. Or maybe you do this professionally and file a schedule C?

Consult your tax advisor for more detailed information on this, along with the state you live in vs. the states where you make the money for more detailed instructions with regard to state taxes.

Good luck...and don't piss off the IRS


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onlinebeginner
Pooh-Bah


Reged: 12/05/06
Posts: 1780
Re: When does the tax man cometh? (USA) [Re: Small Fry]
      #13179384 - 11/29/07 10:54 PM

I'm a student andnot making enough money playing poker to be worried about the IRS breathing down my neck... was curious if I was forced to though by making a big cash in a casino... figured it should be factored in when determining my expected value

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bav
Carpal \'Tunnel


Reged: 11/21/05
Posts: 2857
Loc: Vegas
Re: When does the tax man cometh? (USA) [Re: onlinebeginner]
      #13186083 - 11/30/07 11:50 AM

NO! NONONO! You CANNOT net your wins against your losses unless you file as a professional poker player. You are technically required to list as income every dollar you earn from every winning session. You may also, if you itemize, list all the losing sessions up to the sum of your winning sessions as schedule A deductions. This will cost you a lot more on your taxes than netting wins vs losses (which is the obvious and logical way to do it), but that's the way the IRS claims you must do it. And legally there are no limits on the size of what you have to declare. If you have a $1 winning session, you're supposed to declare it.

Obviously this is SOOO incredibly unfair to a low-income student type who can't itemize (profitably), that I'm not going to bitch if you want to do something rational, if not technically permitted, like net wins vs losses. But I will be annoyed if you're trying to completely avoid paying taxes on gambling income, 'cause then I have to pay more in taxes to make up for you being a cheat.

If you get a W2G or 1099G, you darned well better declare that income on your 1040. They WILL notice if you don't and they WILL come tap you on the shoulder 6mo to 18mo later asking where that income is on your return and suggesting they think you owe them more. And they likely won't be too happy with "yeah, I had a $7000 tourney win in August, but overall for the year I lost money so I didn't include any gambling income".


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Kurn, son of Mogh
norgh


Reged: 09/26/02
Posts: 9146
Loc: Rhode Island and Providence Pl...
Re: When does the tax man cometh? (USA) [Re: onlinebeginner]
      #13187340 - 11/30/07 01:35 PM

If you have a big cash in a US casino, you may have to fill out a form to report the win. That will generate a 1099G which will be sent to you and the IRS in January of the year after the win. That info goes on your tax return for that year due on April 15.

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onlinebeginner
Pooh-Bah


Reged: 12/05/06
Posts: 1780
Re: When does the tax man cometh? (USA) [Re: Kurn, son of Mogh]
      #13188637 - 11/30/07 03:16 PM

So the question becomes when do you start getting a W2G or a 1099G... and how do you factor this in when determining things such as rake and ultimately expected value

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Kurn, son of Mogh
norgh


Reged: 09/26/02
Posts: 9146
Loc: Rhode Island and Providence Pl...
Re: When does the tax man cometh? (USA) [Re: onlinebeginner]
      #13190019 - 11/30/07 04:50 PM

Quote:

So the question becomes when do you start getting a W2G or a 1099G... and how do you factor this in when determining things such as rake and ultimately expected value




You don't get a tax form for cash games, only for tournament wins. It is your responsibility to record and report all your income whether or not someone else provides you with a form.

As for rake and expected vale, those are only relevant to your pre-tax profit.


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BBMW
member


Reged: 10/27/05
Posts: 117
Re: When does the tax man cometh? (USA) [Re: onlinebeginner]
      #13211063 - 12/02/07 02:46 AM

If you cash out for more than $10K pretty much for whatever reason, a currency transaction report will be sent to Treasury. This is not really a tax form. It's used to try and spot money laundering. But if you get one or (especially) more of this sent in for you, you can bet it will end up in the IRS computer. The casinos are supposed to try and track multiple cash outs that add up to $10K in a certain period of time (a day?). So if you end up with Say $12K in chips, and try to do three $4K cashouts, you may get spotted.

Also, I read (on here someplace) that, starting Jan 1, tourney wins over $1,200 will now earn you a 1099G. This does go to the IRS, so you will have to declare any wins.

But non-huge cash wins are still under the radar.


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DMoogle
Pooh-Bah


Reged: 03/04/06
Posts: 2462
Loc: Oakton, VA, USA
Re: When does the tax man cometh? (USA) [Re: bav]
      #13211974 - 12/02/07 03:57 AM

Quote:

NO! NONONO! You CANNOT net your wins against your losses unless you file as a professional poker player. You are technically required to list as income every dollar you earn from every winning session. You may also, if you itemize, list all the losing sessions up to the sum of your winning sessions as schedule A deductions. This will cost you a lot more on your taxes than netting wins vs losses (which is the obvious and logical way to do it), but that's the way the IRS claims you must do it. And legally there are no limits on the size of what you have to declare. If you have a $1 winning session, you're supposed to declare it.

Obviously this is SOOO incredibly unfair to a low-income student type who can't itemize (profitably), that I'm not going to bitch if you want to do something rational, if not technically permitted, like net wins vs losses. But I will be annoyed if you're trying to completely avoid paying taxes on gambling income, 'cause then I have to pay more in taxes to make up for you being a cheat.

If you get a W2G or 1099G, you darned well better declare that income on your 1040. They WILL notice if you don't and they WILL come tap you on the shoulder 6mo to 18mo later asking where that income is on your return and suggesting they think you owe them more. And they likely won't be too happy with "yeah, I had a $7000 tourney win in August, but overall for the year I lost money so I didn't include any gambling income".



What's "a lot more"?


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