Please tell me this tax person doesnt know what they are doing
 

I have made around 50k playing poker this last year, but when I had my taxes done, the person said that I owe like 11k because my earnings were like 100k based on the money that has come into and out of my bank account. I think this is totally wrong. I dont think I should have to pay taxes on my money twice which is what im doing here. I only have to pay taxes on my profits right? It shouldnt matter if I cash out and then put that money back on a site. I should only pay taxes on it once.

or am I wrong?

Re: Please tell me this tax person doesnt know what they are doing
 

Have you read the IRS pubs on gambling winnings?

Re: Please tell me this tax person doesnt know what they are doing
 

Your net and what came into/out of your bank account are all irrelevant, unless you are filing as a pro gambler.

Read the IRS pub on gambling winnings. Brace yourself.

eastbay

Re: Please tell me this tax person doesnt know what they are doing
 

[ QUOTE ]
I have made around 50k playing poker this last year, but when I had my taxes done, the person said that I owe like 11k because my earnings were like 100k based on the money that has come into and out of my bank account.

[/ QUOTE ]

There are specific IRS (as well as state/city) guidelines required for reporting poker winnings. You should definately consult with a tax preparer familiar with all applicable laws for filing gambling winnings/losses.

In general... you must add up all your session wins as income, and add up all your session losses and take them as deductions. You don't simply file a net number. Winnings are considered income when you end a session, not when its deposited to your bank account.

It is very important that you maintain proper records to backup your claims in this regard. If you are playing online, you definately should be using a program like poker tracker, for example!

If you have no records, you open yourself up to considerable risk.

Additionally, if you at any time during the year had $10,000 in offshore accounts (ie all poker rooms + Neteller, etc combined) you are required to file Treasury Form TD F 90-22.1 with the Dept of the Treasury.

From the IRS Website...
[ QUOTE ]
Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.

A payer is required to issue you a Form W-2G if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported irrespective as to whether any portion thereof is subject to withholding. in addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.

You may deduct gambling losses only if you itemize deductions. Claim your gambling losses as a miscellaneous deduction on Form 1040, Schedule A. However, the amount of losses you deduct may not be more than the amount of gambling income you have reported on your return. It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.

[/ QUOTE ]

Re: Please tell me this tax person doesnt know what they are doing
 

it is not clear from the definitions on form Treasury Form TD F 90-22.1 if poker accounts should be included.

I think it is obvious from the form that Neteller falls under their definitions.

Re: Please tell me this tax person doesnt know what they are doing
 

[ QUOTE ]
it is not clear from the definitions on form Treasury Form TD F 90-22.1 if poker accounts should be included.

I think it is obvious from the form that Neteller falls under their definitions.

[/ QUOTE ]

They fall under "other" financial accounts.

Re: Please tell me this tax person doesnt know what they are doing
 

Where is this available?

Re: Please tell me this tax person doesnt know what they are doing
 

Did you try www.irs.gov? Their site even has a search function! [img]/images/graemlins/smile.gif[/img]