Tax Questions

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WillySmackYoAss

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It's been awhile since I've posted here, good to be back.

Hypothetically speaking.

If someone netted $75K for the year in poker. Are they subject to pay any taxes other than income tax? Do they have to pay social security tax, medicare tax, etc?

I'm not finding anything when I google what taxes do professional gamblers have to pay, it gives me a whole bunch of wording that I don't understand completely and doesn't give me a straight answer. I just want to know other than federal and state income tax, what other taxes have to be paid? Thanks.
 
detroitjunkie

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It depends. Do you have another job or is poker your job and you are considered self employed - this will be the major difference.

Also really depends on what country/state you live in and whether or not your win was a big prize in a tournament or grinding it out in cash games (big prizes like at wsop can be taxed as casino winnings, which is WAY higher than standard income tax and is taken at the federal level (I think in USA its close to 30-40% = eeeks!
 
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WillySmackYoAss

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You can be self employed and have a day job. So poker can be a self employed job. I live in NJ. I cashed in the WSOP this year, they give you the full amount as long as you provide a SS#, but that has nothing to do with this question.

Say I make $50K in a regular job where my check every other week shows all the taxes taken out (Federal income, SS tax, medicare tax, nj income tax). Now If I net $75K from poker (tournaments, cash, all together) will I be taxed social security and medicare or anything other than income tax? That's all I want to know.
 
detroitjunkie

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You can be self employed and have a day job. So poker can be a self employed job. I live in NJ. I cashed in the WSOP this year, they give you the full amount as long as you provide a SS#, but that has nothing to do with this question.

Say I make $50K in a regular job where my check every other week shows all the taxes taken out (Federal income, SS tax, medicare tax, nj income tax). Now If I net $75K from poker (tournaments, cash, all together) will I be taxed social security and medicare or anything other than income tax? That's all I want to know.

I am no accountant but I am thinking no you do not. Also you are allowed to claim gambling loses up to the amount that you won. Go to local horse track and pick up a ton of old losing tickets that people throw away, or around a party store and gather up losing scratch offs and lotto tickets on the ground, especially on big race and lotto days so the bets will be bigger....in the end you may not have to pay taxes on any of it at all, much easier to get away with if you have another job.

BTW why would you ever claim anything there is no record of at a casino?...only big tourney wins will typically get recorded.
 
Debi

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It depends on how you claim it. If you claim it as a hobby under gambling wins then no - but you won't be able to make any deductions for expenses etc.

If you file it as a business income like a part time job - yes you will have to pay social security - but you can also deduct expenses.
 
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WillySmackYoAss

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It depends on how you claim it. If you claim it as a hobby under gambling wins then no - but you won't be able to make any deductions for expenses etc.

If you file it as a business income like a part time job - yes you will have to pay social security - but you can also deduct expenses.

Thank you, this is what I was wondering.
 
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WillySmackYoAss

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I am no accountant but I am thinking no you do not. Also you are allowed to claim gambling loses up to the amount that you won. Go to local horse track and pick up a ton of old losing tickets that people throw away, or around a party store and gather up losing scratch offs and lotto tickets on the ground, especially on big race and lotto days so the bets will be bigger....in the end you may not have to pay taxes on any of it at all, much easier to get away with if you have another job.

BTW why would you ever claim anything there is no record of at a casino?...only big tourney wins will typically get recorded.

My thinking is how does one make a substantial purchase (house, car) with a big sum of money earned from poker without filing it?

But I like your thinking about the betting slips.
 
IntenseHeat

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That was a one of the best questions I've ever seen asked on here. I've wondered about this particular subject myself in the past. I just figured that if I was ever able to sustain success long enough to build up the kind winnings that might raise attention that I would just have to contact a tax attorney. It's nice to have an answer to that question.
 
detroitjunkie

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My thinking is how does one make a substantial purchase (house, car) with a big sum of money earned from poker without filing it?

But I like your thinking about the betting slips.

Well if you get audited then its a whole other game...however the chances are pretty thin depending on your tax bracket already and to me worth the risk, otherwise no one will ever know unless there is a rat in the house, at worst you can plea down to just paying the taxes anyways and maybe +$500 fine...I'll always take that chance to save taxes on $50k, especially since that income may take you into a higher bracket - and with Hillary coming in soon, thats not a good thing

Maybe best not to buy a house with cash though if you choose this route, anything else should be fine

Otherwise claim it all and get as many betting slips as you can to take it down, no one can argue compulsive gambler isnt the case, or in this case someone doing poorly at their part time job
 
Dunc8b

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It depends on how you claim it. If you claim it as a hobby under gambling wins then no - but you won't be able to make any deductions for expenses etc.

If you file it as a business income like a part time job - yes you will have to pay social security - but you can also deduct expenses.
I wonder if this is the key point. Wanting to claim expenses for travel, hotels, etc when playing in live games then the winnings would really be "income". I'm in the UK so can offer no relevant info for the OP but the tax issue is a question I have asked myself
 
Debi

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My thinking is how does one make a substantial purchase (house, car) with a big sum of money earned from poker without filing it?

But I like your thinking about the betting slips.

A car you might get away with but you better have the entire amount when you purchase the house because no bank would give you a mortgage for the remainder.

Also expect to get flagged by the IRS.

If you win it playing live any single amount over $5k will have taxes withheld and be reported to the IRS anyway.
 
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Bottom line is that gambling winnings are taxable. There are legitimate ways to lower your tax burden - some of which are already mentioned here. However, trying the scheme against the IRS is never a good idea. The example of collecting losing betting slips at a horse track would blow up pretty quickly if you were audited. The risk of being audited is small, of course, but you're playing with fire. I doubt the IRS would be real eager to cut you a deal if you were obviously trying to game the system. Similarly, no legitimate tax attorney or accountant is going to sign up for a scheme to cheat the IRS. Likewise, casinos have no interest in helping you dodge taxes or launder money.
 
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Debi

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Bottom line is that gambling winnings are taxable. There are legitimate ways to lower your tax burden - some of which are already mentioned here. However, trying the scheme against the IRS is never a good idea. The example of collecting losing betting slips at a horse track would blow up pretty quickly if you were audited. The risk of being audited is small, of course, but you're playing with fire. I doubt the IRS would be real eager to cut you a deal if you were obviously trying to game the system. Similarly, no legitimate tax attorney or accountant is going to sign up for a scheme to cheat the IRS. Likewise, casinos have no interest in helping you dodge taxes or launder money.

Yep - much easier to just do it the right way anyway.
 
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WillySmackYoAss

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A car you might get away with but you better have the entire amount when you purchase the house because no bank would give you a mortgage for the remainder.

Also expect to get flagged by the IRS.

If you win it playing live any single amount over $5k will have taxes withheld and be reported to the IRS anyway.

So what happens if you buy in for a cash game over $5k and then cash out for break even? They tax that?
 
detroitjunkie

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Well you would be doing your own taxes I hope, and for them to actually go to the race tracks and look for video...in what could be YEARS after, would not be something easy to do...and as long as you are not submitting 10k tickets or something obscene then there would not be much to worry about.

If you didnt claim them at all it would be a minor penalty because you can claim you were not trying to cheat the system, you just didnt know or forgot, millions of people have these issues all the time.

For the cash cages to be able to actually track how much you have won or lost would be very difficult in most regards, Im not sure how they would do it aside from tracking your every movement from table to table, seeing if you pocketed anything or returned half the chips to the BJ/casino cages or give them to someone else, because a lot of casinos and card rooms do not require you to submit a rewards card to get chips, NOW if the casino you are at does make you use a rewards card to get chips or play poker then that is a whole different story....but again most do not (and even those that due do not always ask for one).

Do what you want, I am not saying be a tax cheat, but millions of people do it all the time and the IRS never even blinks, they are too busy going after cheats where there is more concrete evidence, and those that are in a much higher bracket. Just do not buy a house with cash and you should be fine.
 
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WillySmackYoAss

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Dakota said any live amount over 5k will have taxes withheld at the casino. I'm curious what happens if you bought 10K in chips, then cashed out $9500, are they gonna withhold taxes on the $9500 even though it's a $500 loss?
 
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Taxes

so how does everyone claim their taxes for their bovada winnings. because you cant just say bovada on the taxes or online gambling.
where do you say you got the money from. if you claim it under gambling winnings. they ask for the companies name and addresss. this is my first year doing this so I was hoping someone with more experience would be able to help me out. I know that bovada is a reputable site, however I just don't no what to claim my taxes under for my bovada winnings. I cant just put it as online gambling because they might say that its illegal. Please Help Thank you
 
John A

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It depends how much you're talking about, and what state you're in. In CA, it's taxed like normal wages, and you can claim any local casino (which we have several).
 
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does anyone know anything about the taxes. what would I claim bovada as on my taxes, what does everyone else do for the taxes. please can someone help me. I don't think I can just write down bovada as the place or online gambling. what would I say? what does everyone else do? thank you
 
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naver650

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Taxes


being that you have experience with bovada please is it possible you can help me out with info on these taxes. what do you claim it as? what do you personally typically do regarding the taxes. because if you put gambling winnings I was told were supposed to give the name of the company and location, but when talking to bovada support they said they recommend we don't mention their name. please if you or anyone can help me that would help me out a lot. thank you
 
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John A

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being that you have experience with bovada please is it possible you can help me out with info on these taxes. what do you claim it as? what do you personally typically do regarding the taxes. because if you put gambling winnings I was told were supposed to give the name of the company and location, but when talking to bovada support they said they recommend we don't mention their name. please if you or anyone can help me that would help me out a lot. thank you

I like to help you, but I'm not qualified to give tax advice. I'd advise you just get a local tax accountant in your area and consult them about this.
 
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naver650

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Taxes

I like to help you, but I'm not qualified to give tax advice. I'd advise you just get a local tax accountant in your area and consult them about this.

I'm located in CA. I understand was just tryna see what you personally do, would I just tell my tax person I won the money from bovada? do you mention to your tax person that you won the money from bovada, or would you say something else possibly?
thank you for your help
 
Sakolik029

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In Russia I have not experienced this but from the official win which is more than a million rubles if I am not mistaken then pokerno about 15% need to pay tax to the state,of course, I could be wrong but it seems so,but for the small winnings to pay anything we do not need
 
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