Taxes on online winning

I am still not clear whether I should pay taxes on online poker winnings. What is the law on this? I've read that guys who play high stakes cash games online declare taxes. Does it apply to micro limit games as well? What about tournament winnings?

You are required by law to report any and all income to the IRS. Whether it be from poker, mowing lawns, or selling drugs.

WVHillbilly said:

You are required by law to report any and all income to the IRS. Whether it be from poker, mowing lawns, or selling drugs.

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So the grass I scrape out of my lawnmower and sell to the dumb kids down the block must be declared?


Shit........

WVHillbilly said:

You are required by law to report any and all income to the IRS. Whether it be from poker, mowing lawns, or selling drugs.

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really?

not sure how it is in the states with taxes, could be interesting to hear to i do play on some of the online rooms located outside, but not reporting anything to our tax thingy tho, not enough either imo :rofl:

all our online rooms there got license in our country is tax free tho

seqas said:

really?

not sure how it is in the states with taxes, could be interesting to hear to i do play on some of the online rooms located outside, but not reporting anything to our tax thingy tho, not enough either imo :rofl:

all our online rooms there got license in our country is tax free tho

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Yes, really.

Depends entirely on where you live.

If you're American then what WV said. If you're Swedish then you pay an even bigger sum in taxes. But if you're Australian like me then you don't pay any taxes on your poker (or any other) gambling winnings

Great that us Aussies dont pay tax, but we have still got legislation which dosent allow us to play online, but thankfully the big sites dont follow our legislation.
The only network that wont allow us is Merge, (afaik) when I tried to make an account there they quoted the legislation to me via e-mail.

yes each state is different . Like here in Oregon if you win over $1200.00 you have to claim it on your taxes.

ALL IN CLUBS said:

yes each state is different . Like here in Oregon if you win over $1200.00 you have to claim it on your taxes.

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It may vary by state for purposes of state taxes, but it does not vary for federal income tax. Any amount is taxable in any state.

Zorba said:

Great that us Aussies dont pay tax, but we have still got legislation which dosent allow us to play online, but thankfully the big sites dont follow our legislation.
The only network that wont allow us is Merge, (afaik) when I tried to make an account there they quoted the legislation to me via e-mail.

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There's actually a bunch of sites that won't allow Australians, because they offer sports betting as well and they'd rather offer us legal sports betting than legally-grey online poker. betfair is one off the top of my head. Poker-only sites and networks aren't bothered by it though because I don't think it's even been established that the Australian government even has any jurisdiction over them if they're based overseas.

Merge was a special case because (IIRC) they had offices and servers based here.

Zorba said:

Great that us Aussies dont pay tax, but we have still got legislation which dosent allow us to play online, but thankfully the big sites dont follow our legislation.
The only network that wont allow us is Merge, (afaik) when I tried to make an account there they quoted the legislation to me via e-mail.

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same in UK no taxes on gambling

ALL IN CLUBS said:

yes each state is different . Like here in Oregon if you win over $1200.00 you have to claim it on your taxes.

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is that 1200 profit or a 1200 win.

i.e. if you was a losing player for 2K over the year then won $1200 on new years eve for a net loss of $800 do you have to pay tax on the $1200

ALL IN CLUBS said:

yes each state is different . Like here in Oregon if you win over $1200.00 you have to claim it on your taxes.

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This is wrong. If you win anything you're supposed to claim it on your taxes but if you win over a certain amount (varies by state) in a tourney or slots they will issue a you a W-2G form when you cash out and withhold taxes.

From my understanding it is anything over $600

Breezy222 said:

From my understanding it is anything over $600

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No, it's any amount at all. The $600 threshold is where they're required to issue a 1099. But legally any amount is taxable and you are required by law to claim it.

rhombus said:

same in UK no taxes on gambling


is that 1200 profit or a 1200 win.

i.e. if you was a losing player for 2K over the year then won $1200 on new years eve for a net loss of $800 do you have to pay tax on the $1200

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ALL $ won is taxable according to the federal government. State laws vary by state. If you won say $10000 in poker, this is considered gambling income. When you file your taxes for that year ending, if you itemize, you can offset your winnings with any losses, up to the amount won. Keep in mind you should keep proof of those losses.

So...... won $10k, lost 5k net income =5k. OR won 10k lost 11k, net income =0

WVHillbilly said:

This is wrong. If you win anything you're supposed to claim it on your taxes but if you win over a certain amount (varies by state) in a tourney or slots they will issue a you a W-2G form when you cash out and withhold taxes.

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CORRECT - the only difference between winning $50 and $1200 (in this case - $600 in a lot of other places) is you are going to get immediate attention and customer service to help you with your taxable income problem

At one time Oregon was also $600 - don't know when it changed. Born and raised in PDX.

boy we are all over the board here...
i too agree that every dime,..yep, selling lawn clippings for 5 dollars is supposed to be claimed as income. i dont care personally if you do im just saying what i believe to be the law as the irs sees it.
i also have heard on the federal level that 600usd or more you will receive a 1099 form from that site. now if you play multiple sites all the 1099s and or the winnings under the 600usd is supposed to be added up together and claimed on taxes. again i dont care if you do or dont thats between you and the irs.
states are different and all over the place, i do believe here in california its 1200 and they will notify irs of your winnings.

wow who really knows? I dont claim anything. I live in cali but i thinks over $1,199.

You're best at sending a tax form in. The IRS will Audit you if they see more in your back account then what is on the tax form.

The IRS gets many reports of cash transactions in excess of $10,000 involving banks, casinos, car dealers and other businesses, plus suspicious-activity reports from banks and disclosures of foreign accounts. A report by Treasury inspectors concluded that these currency transaction reports are a valuable source of audit leads for sniffing out unreported income. The IRS agrees, and it will make greater use of these forms in its audit process. So if you make large cash purchases or deposits, be prepared for IRS scrutiny. Also, be aware that banks and other institutions file reports on suspicious activities that appear to avoid the currency transaction rules (such as persons depositing $9,500 in cash one day and an additional $9,500 in cash two days later).

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http://finance.yahoo.com/news/irs-audit-red-flags--the-dirty-dozen-194425903.html

I still don't know why somebody has to pay taxes from his salary,,but,,it's reality...

Any large amounts stand out to the IRS. Claim low winnings from time to time and u should be out ot the limelight and ok.

This issue is complicated here in brazil, so that there is no specific law on poker and gambling online, but there is a consensus that gives us two alternatives:

1 - Declare the gains from online poker and betting on that value and apply the rate of 27.5%(more deductions) in the case of Brazil refers to the Income Tax (any type of income).

2 -) Declare the gains from betting and online poker as "Exempt Income and non-taxable" in the Statement of Annual Income, considering that there is no specific legislation on the subject, these gains would be tax-exempt in theory

Still, there are many other factors to consider, such as in the case of foreign earnings above $ 500.00 is necessary to justify the source of gain, but in the case and tournament LIVE, as BSOPS (Brazilian Series of Poker) that pokerstars organizes here in Brazil, would be subject to the same rules of a tournament online?

And in the specific case (i include myself in this) who use the neteller for withdrawals? In theory the money does not enter the country because i do the removal of the house of poker, straight to my NETELLER account which is headquartered in the UK, and use the money throug my credit card NETELLER/mastercard to make expenditures, so the money not entering Brazil, not subject to taxation. (No, i am not a tax evader, i just use the laws of the country ).

Finally, there are situations that will only be resolved with the creation of a specific law on the subject ...

In the US doesnt your gross income determine if you must file?

mdnmdn said:

In the US doesnt your gross income determine if you must file?

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Yes, but the minimum is quite low. You'd have to earn so little I'd question how anyone could afford to even play online poker.

Filing Status.........................Minimum Gross Income (under 65).....Minimum Gross Income (65+)
Single ..................................$9,500.........................................$10,950
Head of Household..................$12,200.......................................$13,650
Married Filing Jointly................$19,000.......................................$20,150 (one spouse) $21,300 (both spouses)
Married Filing Separately..........$3,700.........................................$3,700
Widow with Dependent Child.....$15,300.......................................$16,450

As far as I am aware there is no tax payable on online poker winnings in the UK.