This should end all of the false claims about paying US taxes on poker

[atomicsoda]

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you are scaring people who make no money gambling online.


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In some ways, accurate records are more important for net losers. There are several examples of losing gamblers who hit a big, documented jackpot and were forced to pay taxes on it even though they were net losers for the year, since without records they could not prove any losses.

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Yes, that is true. Most people are forced to pay on jackpots. Hang around an OTB parlor and you will see how people will complain about this after hitting ther trifecta and scheme of ways to find losses to offset so they can get the withholding back on their tax return.

[genesisgkh1]

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Our tax CPA pushed back hard when I told him that we needed to report gross wins and losses, and also when I told him that I had >$5,000 in net winnings and no W-2G. He told me that he had never had a client report any gambling winnings unless they were straight from a W-2G.

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Wow. Just.....wow.

A note to winning poker players: It pays to get a CPA that actually knows what the IRS rules are. Seriously. It's not their ass when the [censored] hits the fan....it's yours.

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Another example of someone who simply does not wish to hear real world advice from a tax pro. (BTW, I am not taking sides. I just find it amazing that no one seems to want to balance practical advice with their own opinion)

[gummy d]

for example
I play recreationally and the net of my winning sessions is 8000. The net of my loosing sessions is 11,000. I have an income of 16,000 from a regular job.
When filing I would not take the standard deduction. I would claim 8000 in "other income". When taking deductions I would claim 8000 as well as mortgage interest on home, medical bills etc... The end result being I made 24,000 and i'm taking 11,000 in deductions.
Is this basicly the idea for a losing rec. gambler with a job and home? Doesn't seem right. Could anyone correct me here?
Give some back to a fish.

[Dave2020]

Thanks very much Russ Fox for your reply!
Just to further clarify... As long as I had a certain amount of taxable income for 2005, quarterly taxes must have been payed for 2006 regardless of whether I filed as a pro or not in 2005. Quarterly payments for 2006 should have been based on whatever my 2005 taxable income was?

[dollerAday]

No the end would be 13k in income.

[Wake up CALL]

From IRS Publication 529[ QUOTE ]
Gambling Losses Up to the Amount of Gambling Winnings
You must report the full amount of your gambling winnings for the year on Form 1040, line 21. You deduct your gambling losses for the year on Schedule A (Form 1040), line 27. You cannot deduct gambling losses that are more than your winnings. Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR).



You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.



Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.

Your diary should contain at least the following information.

The date and type of your specific wager or wagering activity.

The name and address or location of the gambling establishment.

The names of other persons present with you at the gambling establishment.

The amount(s) you won or lost.


Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment.

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and

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These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances.

Keno. Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records.

Slot machines. A record of the machine number and all winnings by date and time the machine was played.

Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage.

Bingo. A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc.

Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack.

Lotteries. A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements.

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Russ Fox Session Definition

[RoundGuy]

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Did you also believe that Y2K was going to be the end of the world? How is life in the bunker?

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In a bunker, eh? Hmmm. As opposed to having your head firmly implanted in your ass like some of the ignorant posters in this thread? I'll take the bunker. ( and no, I wasn't a Y2K'er)

[gummy d]

Don't you mean yes, the end would be 13k in income?

[atomicsoda]

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Aren't most people who do any gambling violating the law when they prepare their taxes?


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I think most people prepare their taxes correctly.

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OK. Almost no one declares cash wins in casinos or even keeps track or wins or losses. If they win a slot jackpot or something they pay tax on that. I am not talking about people who gamble everyday or derive income from gambling but recreational gamblers.

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Well, now you know one recreational gambler who does keep track AND reports it.

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your mother must be very proud.

[Lottery Larry]

I've talked to the IRS- while the rep I spoke to was a little shaky, she basically said that a tournament is a session. A satellite tourney is a separate session from the event you're winning your way into.

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Under that IRS definition, if an online player stays seated at the same table, then they are still in the same session, correct?

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That's how I've read it/interpreted it, from IRS listings and from other CPA's writing on in (including the author of the article I linked to- that author and others have written about this for years.


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BTW, do you have a link to your article on the definition of a session?

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A quick search on the IRS website just now. While you can't find a cut and dried definition (I'm sure they left it vague to avoid creating loopholes), you can extrapolate what a session should be (time/date, length of play, location of session) from putting 2+2 together.... in MY UNPROFESSIONAL NON-LICENSED OPINION.


Gambling Income and Expenses
http://www.irs.gov/taxtopics/tc419.html

"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."


http://www.irs.gov/publications/p529/ar02.html#d0e2065

"You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses. "

"Your diary should contain at least the following information.

The date and type of your specific wager or wagering activity.

The name and address or location of the gambling establishment.

The names of other persons present with you at the gambling establishment.

The amount(s) you won or lost.
Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment.

For specific wagering transactions, you can use the following items to support your winnings and losses.


These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances.

Keno. Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records.

Slot machines. A record of the machine number and all winnings by date and time the machine was played.

Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage.

Bingo. A record of the number of games played , cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc.

Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack.

Lotteries. A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements. "



And, the bonus for you illegal income online gambling fans:

http://www.irs.gov/publications/p525/ar02.html#d0e7770
"Bribes. If you receive a bribe, include it in your income. "

http://www.irs.gov/compliance/enforcement/article/0,,id=129064,00.html
"On June, 13, 2005, in Houston, TX, Robert Angleton was sentenced to 87 months in prison and ordered to pay a $125,000 fine for evading more than $1 million in federal excise taxes on gambling wagers of over $64 million related to his bookmaking business."


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Our tax CPA pushed back hard when I told him that we needed to report gross wins and losses, and also when I told him that I had >$5,000 in net winnings and no W-2G.

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Fire him if he won't do it correctly, as you're requesting.


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In fact, most casino's do not even allow you to take written notes of your results at the Blackjack table.

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I've never been stopped- what regulation are you claiming to refer to, regarding this?