Originally Posted by Brann6
If internet poker is regulated the sites can legally operate in the US and be taxed as any legal business is taxed.
If taxation on players follows casino and racetrack standards, players would only be taxed on winnings above a certain limit.
I used to make a fair amount of money playing the horses in Maryland and was taxed 20% one time when I hit a triple for $1400. Never paid a dime on my other winnings, although I did keep records just in case.
Originally Posted by zachvac
This is false. In casinos as well as online now you have to pay taxes on every dime you win. The problem is it's hard to enforce. Many people now don't pay taxes on online winnings. Taxing and regulating it would simply ensure that people do pay taxes. I can only hope they don't further tax it other than enforcing existing laws, but I do get nervous about that.
Applicable thread: http://www.cardschat.com/f13/taxes-poker-earnings-140173/ This was my final response...
"How can the IRS 'get you on it', unless the Feds are hacking your computer? And to do so without just cause would probably be thrown out. Wouldn't you think we'd be hearing about it if anyone got caught and proscecuted for even playing online poker, much less tax evasion? Any stories or accounts welcome from anyone.
Live poker rooms or horse racing are a different story. US regulated and legal. And I believe they ask for ID and send/give you a 1099 or something if you cash out over a certain amount. I thought it was $500 but could be wrong. But I believe this info is reported to the IRS by the casinos/track, so you better report it. But this is why serious pony gamblers will make a lot of small bets on the same horse - better to have 10 wins at $100 each, than a single one for $1000.
But with online poker earnings not being reported to the IRS, I'd think you'd be nuts to just hand it over to them unless you could make a good case for any likelihood of getting caught."
So I believe you are both correct. But Zach, you might be required to report small winnings at poker, horses, etc, but not enforceable - no paper trail. It's different when a casino is reporting your winnings to the IRS. What I don't understand is this...Can't anyone just say that they lost $1000 on the slots
, enough to offset your winnings?
Brann6, I suppose it's possible that a $2 bet can rake in $1400, like in a 50-1 trifecta. If not, ya gotta keep those bets small. :-)