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#11
10-29-2007, 09:05 AM
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Re: Never paid taxes before... how much should I expect to pay?
[ QUOTE ]
Has anyone ever been audited for not paying taxes on their poker earnings? I have recently been way more succesful and am starting to worry about the amounts I am not being taxed on. [/ QUOTE ] Willfully failing to report income on your tax return is a crime. Not just audited, people have been criminally charged for failing to report gambling income. It would have to be a pretty big amount before you would have to worry about jail, but even without a jail sentence the fines will break you. I'd put the rough cut off point at about 10K, less than that and just the IRS will take your money, more than that and you can expect the DOJ to take some money too. Over a 100K and a trip to "club fed" is quite likely. Skallagrim 
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#12
10-29-2007, 09:51 AM
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Re: Never paid taxes before... how much should I expect to pay?
I'd try to breakdown your Pokertracker database by day and consider each day a session. Talk to your accountant, but I think that is a reasonable approach to defining a session.
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#13
10-29-2007, 10:44 AM
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Re: Never paid taxes before... how much should I expect to pay?
I'm in exactly the same situation as DMoogle (a few k less in earnings though), and paying $10,700 sounds like a TON. That's going to be like 60% of my effective online bankroll. ugh poker is so much harder when you factor in taxes.
Is there anything I should do to help lessen the damage of tax day (other than not spending anything)? I will be paying this all in a lump sum on April 15, correct? Do I just need to accept that my roll will be cut in half once per year?
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#14
10-29-2007, 11:00 AM
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Re: Never paid taxes before... how much should I expect to pay?
[ QUOTE ]
I'm in exactly the same situation as DMoogle (a few k less in earnings though), and paying $10,700 sounds like a TON. That's going to be like 60% of my effective online bankroll. ugh poker is so much harder when you factor in taxes. Is there anything I should do to help lessen the damage of tax day (other than not spending anything)? I will be paying this all in a lump sum on April 15, correct? Do I just need to accept that my roll will be cut in half once per year? [/ QUOTE ] Consult a CPA. If there is a chance you are filing pro or will be considered a pro by the IRS you should be filing quarterly. If you do not file quarterly there are additional penalities and interest. D$D
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#16
10-29-2007, 11:13 AM
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Re: Never paid taxes before... how much should I expect to pay?
[ QUOTE ]
Is there anything I should do to help lessen the damage of tax day (other than not spending anything)? I will be paying this all in a lump sum on April 15, correct? Do I just need to accept that my roll will be cut in half once per year? [/ QUOTE ] You likely should be paying quarterly estimated taxes. The way to lessen this is to plan ahead. This is done for people with regular jobs via payroll deduction. You simply have to do your own payroll deduction. If you made a gross salary of $100K at a "real job", would you spend $100K and then wonder where to get the ~$40K for taxes on 4/15? As you'd only see your net pay, you'd likely based your spending and savings on that net amount. If you treat your poker income the same way, you should be fine.
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#17
10-29-2007, 11:51 AM
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Re: Never paid taxes before... how much should I expect to pay?
You said you "made" 50k from poker. Does this mean you got paid out 50k? If not, I was under the impression that you only get taxed on what you get paid out of your poker account. Like stocks, you dont pay taxes until you actually cash out. You pay taxes on the amount you withdrew into your checking account or through WU or whatever method you used. This would be listed in "other income" on 1040 (if you did not file as a pro). Then if you itemize you can claim the losses. If you dont itemize that means the standard deduction was more than your losses anyway so you wouldn't want to itemize and count your losses.
There is no way for the IRS to know how much you have in your offshore accounts. All they can know is how much you have been paid out into your checking account.
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#18
10-29-2007, 11:57 AM
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Re: Never paid taxes before... how much should I expect to pay?
[ QUOTE ]
You said you "made" 50k from poker. Does this mean you got paid out 50k? If not, I was under the impression that you only get taxed on what you get paid out of your poker account. Like stocks, you dont pay taxes until you actually cash out. Then you pay taxes on the amount you gained over the original amount invested. [/ QUOTE ] Wrong!!! First of all, I'm not the one who make $50K (I made more), so this may not be to me. I'll answer anyway. You're taxed on your earning on a session-by-session basis. The IRS does not consider this investment income. [ QUOTE ] Because there is no way for the IRS to know how much you have in your offshore accounts. All they can know is how much you have been paid out into your checking account. [/ QUOTE ] Your taxes aren't based on what you think the IRS knows.
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#19
10-29-2007, 12:11 PM
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Re: Never paid taxes before... how much should I expect to pay?
TE, what about the person who bets sports mostly. Would they need to keep track of every bet made?
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#20
10-29-2007, 01:29 PM
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Re: Never paid taxes before... how much should I expect to pay?
Say you're a winning online player and you dump all of your winnings in the slots or live action???? You don't get a reciept showing how much you lost...
Also, PT isn't going to be 100% accurate. You have to take tourney buy-ins and when you played on a different CPU into consideration as well. Couldn't you consider deposits as losses and cashouts as gains?. Why would you have to break down each day and count it as a session?
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