Poker Winnings and taxes

Hi everybody

I've been playing online poker for a couple years now. Recently I've developed a fairly successful strategy that nets me a few hundred dollars a week. It's a fairly lucrative endeavor that pays my rent for me. This is the first time that online poker has consistently given me an income.

But now I'm concerned about taxes. I've read up a bit about gambling taxes and it looks like the tax code includes poker with winning the lottery and slot machines...so it's not very efficient when it comes to fitting your poker winnings in with your regular income (for example, if you win $10k over a year and lose $7k...you still count that $10k as your income...the $7k comes out as an itemized deduction...so while you only REALLY made $3k...your income is still knocked up by $10k which can cause all sorts of problems for poor folk like me).

Is there anybody here who plays poker seriously as a source of income who can give me some advice and maybe point me in the direction of some helpful articles/websites/books?

Thanks

I'd of thought it would be end of year taxes total(s)? Meaning you don't declare every session, that would be crazy wouldn't it?

If you win $200.00 per week like you say you do on average then can't you just declare these winnings the end of each month and then get taxed on this amount per month therefore it wouldn't be a problem? If it's based yearly - then you're a massively in profit when winning 200 a week, maybe just keep the tax amount and put to one side for final payment?

Then again I live in the UK so there is no tax on gambling so I'm not 100% sure but for any sort of tax

I assume you're american, some weird laws and the gambling law is sick. I don't think I could play poker, being taxed for it. I most definitely would be a loser long term, I'd like to see how others do.

I'm sure some people will just "hide" poker winnings if it isn't a huge amount no?

LoL @ Lottery tax...that's so unreal what a joke.

ps: Out of curiosity - what sort of percentages are we talking on gambling taxes?

I forgot to mention..

I'm from the US (Missouri). We don't declare taxes monthly here.

From what I understand from the tax code, we are to report our earnings per session (which makes things confusing if you play online). You're supposed to keep a record of your winnings per session and report it at the end of the year.

That's so very brutal. What an odd law...obviously for very beneficial reasons for the government.

So basically you get taxed on losing as well? lol

As for keeping records of each session and reporting at the end of the year....that sounds unreasonable and indeed very confusing. I'm unsure as to why they won't/can't accept an end of year earnings from poker just makes much more sense. Maybe they are trying to get people to stop playing poker because you end up paying more tax on each session you win or lose lol.

Here government, I've profited $10,000 this year, please deduct my taxes from this. < Surely that would be enough? Maybe ask them.

I think this is why Isildur1 is being chased from the Swedish government because of their ludicrous ruling on taxes. You get taxed on loses as well as winnings and with the stakes he was playing he owes the Swedish government $150,000,000 million

Well, I think it's more a matter of poker being lumped in with all gambling that causes the problems. Poker just recently became very big and I guess updating the tax status isn't high on most people's priority list.

Jake,

With everything going on I am not sure what this has done to your ability to get consistent profit. My advice is to find a tax accountant. If you are winning 10K a year you need to pay taxes cause otherwise if caught you are paying big fine (possibly some time in Jail if fraud found). To pay as personal income you will not like the results as 10K may bump up your bracket then you have to pay higher % which after taking out your losses equates to a break even or possibly loss....

An accountant may recomend that you create a corporation in which is your poker playing. This way you can write off all of your losses and expenses as a corporation would. The cost to set something up like this should be minimal (couple hundered) in comparison to the taxes you will save. If possible, the benifit of this is you can likely add so many write offs that you break even or loose money over the year... The bad news is it will be a lot of receipt collecting and paperwork.

Again I am not sure if this is 100% possible but with my limited amount of knowledge in tax code and business law I think that would be the way to go as in the US tax laws for personal gaming makes me sick with the taxation.