To File Or Not To File....Plz Help

[DeadlyGambit]

I know this question has probably been posted a thousand times, but I've used the search engine and still can't find a straight answer.

I've probably withdrew around $2000 from neteller this year, maybe less. Do I need to pay taxes on this money?

[frommagio]

[ QUOTE ]
I know this question has probably been posted a thousand times, but I've used the search engine and still can't find a straight answer.

I've probably withdrew around $2000 from neteller this year, maybe less. Do I need to pay taxes on this money?

[/ QUOTE ]
Not if you deposited $5000.

[DeadlyGambit]

Not if I've deposited a TOTAL of $5k into neteller throughout the year, like when switching from site to site?
I've never deposited a lump sum of $5k into neteller, if that's what you mean.

[poorolrich]

It looks like he is saying that if you have deposited(lost) more than the $2000 dollars then you don't have to file. Not right. You would have to declare your winnings and declare your losses(no more than your winnings). If you had $2000 in winnings and $2000 in losses you wouldn't be liable for any taxes but you have to file to be an honest citizen. Although, if you cannot itemize your deductions then you are out of luck. Also, if you live in a State that does not allow you to deduct gambling losses then you are out of luck as far as state taxes go. I know many 2+2ers will disagree but if you have ABSOLUTELY no reason to think you will be audited I wouldn't worry about claiming the $2000 as income.

[LotteryOrPoker]

If you made less than 50k last year there are a number of sites linked from the IRS web site with free filing services available to you. Almost everyone of those services will ask if you had any gambling winnings last year. If you are filing on any other earnings that might be an easy way to include what you need to include.

[ncboiler]

[ QUOTE ]
[ QUOTE ]
I know this question has probably been posted a thousand times, but I've used the search engine and still can't find a straight answer.

I've probably withdrew around $2000 from neteller this year, maybe less. Do I need to pay taxes on this money?

[/ QUOTE ]
Not if you deposited $5000.

[/ QUOTE ]

I'm pretty sure this is not true. Typically you can't net your wins and looses. Winnings are income and losses are a deduction. If you file as a professional you can net your wins and losses. At least that's the way I understand it.

[Skallagrim]

Your winnings are income. You can (at least at the Federal level) deduct your losses up to the amount of your winnings. Unless you gamble so much that the amount of winnings would put you in a higher tax bracket, the IRS could really care less about your reporting that you won 2000 and lost more than 2000 over the year because discovering this fact does not get them any more money from you. But if you are an overall winner of any decent amount, you should include it in your taxes. Not reporting income is a crime.

[srcartman]

Let's say, you're someone who's played a lot recreationally over the last few years, and don't keep any records (other than each site's transaction history).

What advice would their be to someone like that in terms of filing?

[Skallagrim]

[ QUOTE ]
Let's say, you're someone who's played a lot recreationally over the last few years, and don't keep any records (other than each site's transaction history).

What advice would their be to someone like that in terms of filing?

[/ QUOTE ]

If you made any decent profit in any of those years, see an accountant and file. By decent I mean over $1000. Thats a pretty conservative figure, as it would proably take 10x that amount to get the IRS interested, but you will feel a lot better about yourself [img]/images/graemlins/smile.gif[/img].

If you overall lost money, dont worry about it unless you gamble at the level of a vegas whale and if you have that much money why are you posting here for advice?

As for actually filling out the return, just use the numbers from the transaction history as the form wants a yearly number for tax purposes. So if you history shows a 1500 profit, either list the profit alone, or guess at a number for overall winnings and then put 1500 less than that as an itemized deduction. Although this record keeping will be insufficient for an audit, as it is a fair way to determine total tax liability you wont get in any real trouble. NOTE THIS ADVICE IS NOT LEGAL ADVICE AND IS BAD ADVICE FOR ANYONE MAKING A SERIOUS YEARLY PROFIT! If thats you get a real accountant and keep "session records."

[DeadlyGambit]

Anyone care to clarify frommagio's response?