Paying Taxes on Gambling Winnings in Washington State
 

Anyone planning on filing in Washington?


Anyone think it is a BAD IDEA?

Re: Paying Taxes on Gambling Winnings in Washington State
 

hmm i'm not sure, I would probabaly just say it's from live play.

Re: Paying Taxes on Gambling Winnings in Washington State
 

I don't see how Washington will care, because there is no state income tax. Why would the IRS be giving Washington info about what you claim?

Re: Paying Taxes on Gambling Winnings in Washington State
 

Bad idea NOT to file. Washington State has not gone after any players for playing online. They can't even use your tax info to charge you with a crime, anyway.

Re: Paying Taxes on Gambling Winnings in Washington State
 

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Bad idea NOT to file. Washington State has not gone after any players for playing online. They can't even use your tax info to charge you with a crime, anyway.

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Thats what I was thinking, other people said differently.


To clarify, I wasn't thinking about not filing. I could file in Minnesota instead, but I would prefer not to pay their state income tax.

Re: Paying Taxes on Gambling Winnings in Washington State
 

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hmm i'm not sure, I would probabaly just say it's from live play.

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Since live play is prevalent enough, anything even labelled "Gambling Winnings" (as my TurboTax program reported it in the past) doesn't necessarily allude to the gambling being online.

Re: Paying Taxes on Gambling Winnings in Washington State
 

how is washington even gonna know? like was stated: there is no state income tax.

the IRS can't hand you over on a silver platter, and they probably don't care to anyways.

the IRS would have to KNOW that it was online play, THEN tell washington state about it, THEN washington would have to actually try to nail you for something

Re: Paying Taxes on Gambling Winnings in Washington State
 

First there is no place on your tax return where you have to disclose the nature of your nonprofessional gambling. It's just two numbers (wins and losses) and it could be the lottery for all anyone knows.

Remember that it is not illegal for Washington state residents to gamble online. What is actually illegal is gambling online while you are in Washington which is a very different thing and not so easy to prove in court beyond a reasonable doubt.

Re: Paying Taxes on Gambling Winnings in Washington State
 

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First there is no place on your tax return where you have to disclose the nature of your nonprofessional gambling. It's just two numbers (wins and losses) and it could be the lottery for all anyone knows.

Remember that it is not illegal for Washington state residents to gamble online. What is actually illegal is gambling online while you are in Washington which is a very different thing and not so easy to prove in court beyond a reasonable doubt.

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I'm filing as a professional.

If I was filing non-professional I definitely wouldn't be concerned.


But considering that I am a student and am reporting income that is 25x my previous year's income, I am pretty sure that I am going to get AUDITED. And when I do I will have to provide proof of my session by session wins/losses, some of which were incurred while in school in Tacoma, Washington from Sept.-Dec.


I know Washington has no state income tax, which is why I want to file there, but if I am AUDITED, is there still 0% chance someone in the state will be notified?

Re: Paying Taxes on Gambling Winnings in Washington State
 

Mr.FeelNothing,

The odds of getting audited are about .93%, (130.6 million individual returns of which only 1,007,874 were audited in 2005)so I wouldn't necessarily worry about that. And as a student, (like you?), i file as a professional, and went from 0 income to 6 figures in one year. Just pay your taxes, and you'll be fine. If you are worried hire a CPA and he'll sign off on your taxes.