Taxes on Poker Winnings

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BlakeBrown

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I know you are supposed to file taxes, but can you avoid it? Honestly the reason I ask is because I would hate to win the ME and lose 60% of it to the man... Does that make sense? I heard that Ryan Riess relocated to the UK technically so he wouldn't have to pay taxes, but can you do that? I think it is unfair because if you win back your buy-in, you will be losing technically %20-60 in a higher buy in tournament to taxes... What about cash games? Could they even tell if you don't file taxes, because how would they know? Would you have to list this as your main income? I personally feel like almost every pro either lies greatly about their taxes or doesn't pay them, thoughts?
 
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BlakeBrown

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Also if you were not that great or had a losing year, would you have to put salt on the wound and pay a minimum of 30% extra on your losses? You could just argue that you do not have a job and just like to gamble I suppose, therefore not technically having an income
 
Debi

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If you avoid it that is tax evasion so proceed with caution ;)

If you win more than $5k you couldn't get away with it because the casino notifies the IRS of your winnings.

You can move to another country if they will let you live there - but if it is after you win the money you still have to pay taxes on it.

Most of the pros I know have a tax attorney and pay taxes.

I file my own taxes and I claim my profits after my losses are deducted.

You have a choice of filing it as income or as gambling winnings as a hobby. The advantage of filing as income is that you can also deduct related expenses - but you have to pay social security taxes as well. Each person has to work out which method is best for them.

There probably are a lot of people who don't claim their cash game winnings - but you are supposed to.
 
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luchoq10

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i hate taxes because if i go to the Mainevent to the wsop and i win, i will win the half of the winning :(
 
Carl Trooper

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I know you are supposed to file taxes, but can you avoid it? Honestly the reason I ask is because I would hate to win the ME and lose 60% of it to the man... Does that make sense? I heard that Ryan Riess relocated to the UK technically so he wouldn't have to pay taxes, but can you do that? I think it is unfair because if you win back your buy-in, you will be losing technically %20-60 in a higher buy in tournament to taxes... What about cash games? Could they even tell if you don't file taxes, because how would they know? Would you have to list this as your main income? I personally feel like almost every pro either lies greatly about their taxes or doesn't pay them, thoughts?



I am pretty sure you can't just relocate if you win to avoid paying taxes. The tax bracket for winning the ME would be about 40%... not 60%. Its still a big load of BS if you ask me. With a score that big, you are not avoiding taxes.

Smaller scores, you can just claim losses.
 
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BlakeBrown

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Ok well say you won the WSOP, and you got your huge stacks of cash... Hypothetically, if you just walked away (this isn't about somebody robbing you) but would it be found out? What if you were like Stuey Ungar, and you admittedly went and blew it on horses how would you prove it?
 
Carl Trooper

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Ok well say you won the WSOP, and you got your huge stacks of cash... Hypothetically, if you just walked away (this isn't about somebody robbing you) but would it be found out? What if you were like Stuey Ungar, and you admittedly went and blew it on horses how would you prove it?


Well with that amount of money you would be expected to prove you lost it (I.e. betting slips etc.)

You can't walk out of a casino with millions and no W2. It just is NEVER going to happen. The IRS will know 100% of those winnings. Now lets say you take down an online tourney for 20k or say even 100k. You can easily get away with taking those funds out slowly and depositing them in your bank without question.

But when you go to a bank and make a deposit of 10k or more, they have to report it, so keep that in mind!
 
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Bowman

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I would never skip out on paying taxes. Not a good idea, ever.

Taxes also help pay for things like the roads you drive on, the schools you should go to to get a better job so you don't have to rely on poker. And if you win the WSOP haah you seriously worried about paying taxes?

I know no one wants to pay taxes, but it is a good thing. Otherwise I recommend moving to a location where the taxes are lower. Why risk prison time or getting fined. Guess I am an honest man, but I was raised betting on horses and the like and all winnings being reported. It's a good feeling, not bad to report those winnings.
 
XXPXXP

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I got a project regarding to a business part involving return tax.

There is one solution I am able to provide to u.

there are many companies who sold return tax credit.
If you need to pay something more than 25K tax bill.
you may try buy tax credit from them.
it is all a matter sign in a contract with a paper company.
In that case, like you want to pay 25K tax bill, you may spend like about 10K or a little more to buy that tax credit.
therefore it keeps you about 15K extra cash. and it is legal.
 
jolubman

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Let's first have legal poker at the national level then we can talk about taxes. Actually, you are suppose to pay taxes now.
 
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Zero2Hero

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You can also claim your losses. Keep your buy in receipts.
 
Propane Goat

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I'm not a tax pro but Riess moving to the UK to avoid taxes sounds kind of fishy, first of all US citizens are taxed on income earned abroad, secondly the UK is one of the countries with the highest tax rates worldwide. More likely than not he's there so he can play on PS/FTP.

As a US citizen you are allowed an exemption on the first ~$70k (I think) of income earned abroad, the key word is "earned" and I have no idea if gambling winnings fall into that category. If they don't, then it's likely that double taxation will be kicking in.
 
Zorba

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I like it here in Aus no taxes on winnings.
 
trekmaster

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Always pay the taxes that way there is nothing to worry aboutnSkist around it and getting caught will cost more in the end.
 
DarkRoster33

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In my country Latvia there is no taxes for gambling wins, that means i am totaly free of paying anything from my winnings ?
 
JPoling

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It is not as bad as you think. Also, if you fill it put as you are a gambler lot of expenses cam be a "wrote off" as for winning the main event and not wanting to pay taxes...well who do you think you are? And trust me they arent even taking half of your winnings. If i'm not mistaken it is actually about33% don't hold me to that.
 
loafes

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Here in Australia they don't consider anyone to be a professional gambler and recognize that often gambling winnings will barely cover what people lose gambling. So no taxes on any gambling winnings :D

Instead I think they get the tax revenue by heavily taxing gambling operators.


One thing I am curious about though is what would happen if I were to win something like the main event? I wouldn't be charged taxes in Australia, but then it's an event run in America by American casinos. Would the casino have to withhold anything?
 
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BlakeBrown

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Yeah, what would happen if you won the ME in the USA but were from an untaxed country like UK, AUS, or Latvia? And if those places are untaxed and America is not, why not just have it in a tax-haven?
 
Propane Goat

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loafes

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In general, many foreigners will see 30% of monies won in the USA be withheld and may or may not be able to get that back depending on tax treaties between the USA and their home countries, and whether or not they can prove gambling losses to the satisfaction of the IRS. Canadians are exempt from the 30% withholding.

http://www.taxandcontroversy.com/20...gambling-winnings-for-nonresident-aliens.html

http://www.irs.gov/publications/p515/ar02.html


Thanks, that's the info I was curious about. Kind of sucks that the man would get some of my money if I ever won enough, although I don't see myself ever going to America and winning so the points moot :p
 
wanderingthehall

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Like others have said, the key is to track your losses, because you can deduct those from the taxable income. I believe if you always use your players card at a casino, the casino can give you a win/loss statement for the year to help prove losses.
 
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BlakeBrown

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Can an American claim residency in Canada in June until the WSOP is over?
 
joker131

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give up playing if its a bind paying your taxes. your going to get caught, then your in big trouble having to prove your win and loses. in uk we pay taxes just to walk down the street mainly at source. so its not as good as u think
 
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