withdrawing and the IRS

#1 7th June 2010, 5:08 AM

not that it matters to me (hopefully yet) but can the money that you cash out of poker sites be taxed? I just found out about the bank transfer and it seems like a good idea but what if you end up taking out a substantial amount and get your taxes audited? if they are going to be looking at this i think the best way would be to use the check withdraw method and store the cash around your house, that is only if you end up taking out a rather large sum of money.

#2 7th June 2010, 5:36 AM

Hope this article helps.

http://www.parttimepoker.com/poker-and-taxes

The myth of withdrawals

There is a myth many online poker players still seem to believe in; that you are supposed to pay taxes on withdrawals. But deposits and withdrawals are not what the IRS is interested in or concerned about. The actual wins and losses are the records you need to keep. This myth probably came about by someone trying to evade their tax burden, thinking that the IRS will have a hard time proving you made money online unless you withdraw it to your bank. While this may be true, it is quite a risk and certainly not advisable.

So if you play a poker tournament on December 31, 2009 and win $300, that $300 is taxable when you file your 2009 income taxes. It does not matter if you leave the money in your account, or even if you lose that money on Jan 1 playing a $300 tournament. The $300 must be reported as income for 2009.

Here's another article on the related topic:

http://law.suite101.com/article.cfm/...poker-winnings

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