I.R.S.

[GordonStr222]

Ok I have seen a few threads on this but many have been pretty vague in their information. I would really like to know how much do you pay taxes on if you're a poker player making an income... What is it based on? Is it a certain percentage of your winning's? I have money on stars and I would like to cash out every week or month but I'm not familiar with the poker and IRS policies or laws.. IS there a website or attorneys that anyone knows off.. I appreciate you're help in advance... Thank you...

 

[Pothole]

This is where more US bull crap comes into force. Poker winnings are taxed as income as opposed to casino wins ( slots ect ) which are taxed as gambling winnings. The difference between the two, is that gambling losses can be claimed against winnings, whereas poker loses cannot and that is why poker players want poker to be defined as a sport, not a game of chance, so the IRS tax take is lower. Personally, if I lived in the US, I'd declare nothing and let it ride. There is no record of the IRS going after an online player for taxes, regardless of the many poker shows that describe how much US citizens have won online.

 

[GordonStr222]

This is where more US bull crap comes into force. Poker winnings are taxed as income as opposed to casino wins ( slots ect ) which are taxed as gambling winnings. The difference between the two, is that gambling losses can be claimed against winnings, whereas poker loses cannot and that is why poker players want poker to be defined as a sport, not a game of chance, so the IRS tax take is lower. Personally, if I lived in the US, I'd declare nothing and let it ride. There is no record of the IRS going after an online player for taxes, regardless of the many poker shows that describe how much US citizens have won online.

Really.... I've been trying to find a website or something on online players who win or cash out on a regular basis out of any online site from the U.S. .... Some say over 500$ or 10,000$ but I really don't know what to do... I won a tournament in 2007 at the commerce casino in Los Angeles and forgot to claim my winnings and I'm still making payments on those taxes.. I'm still confused and I don't want to get involved with the I.R.S. ever again.... I still wonder if I had claim my winnnings that year how much would have they taxed me for.... Thanks for your help.

 

[Pothole]

Gamling taxes in the US are taxed at the flat rate of 30% less losses. Poker winnings are taxed at whatever tax bracket you income puts you in.

 

[LarkMarlow]

I'm wondering how the IRS can differentiate between poker and any other casinos winnings. Maybe it has something to do with the amount of money won? Like anything over $10K has to be reported to the IRS specifically as poker winnings?


When I've won substantial amounts in the 4 figure range playing live here in the midwest I've sometimes been issued a 1099 for gambling wins and sometimes I haven't, depending on poker room policy.

Regarding online winnings, the articles section at this website is really interesting-- http://www.pokerdeductions.com

The author, an accountant named Ann-Margaret Johnston, says that dealing with online wins at this point is pretty much based on an honor system because of the lack of documentation.

 

[Stick66]

Ok I have seen a few threads on this but many have been pretty vague in their information. I would really like to know how much do you pay taxes on if you're a poker player making an income... What is it based on? Is it a certain percentage of your winning's? I have money on stars and I would like to cash out every week or month but I'm not familiar with the poker and IRS policies or laws.. IS there a website or attorneys that anyone knows off.. I appreciate you're help in advance... Thank you...

This book is all you need:

http://stickspoker.blogspot.com/2008/06/book-review-how-to-turn-your-poker.html

It totally helped me file last year. Answers all the questions.

 

[LuckyChippy]

If you are serious about regularly cashing out speak to a tax lawyer, they are the ones who know.

EDIT: I just read the review that MrSticker posted and its very good.

 

[Sysvr4]

This guy posted on 2+2 for years. Not sure if he still does or not, but he's very well-versed in taxation of poker income, and he's put 99% of what you need to know on his blog. Spend a weekend, knock yourself out... it's all there.

http://taxabletalk.com/

 

[DaBigBoss]

I want this issue talked more about..I mean if im a us player and for instance win 100,000 and want to cash out online ..how can i deposit into my bank without alerting the IRS , I mean the bank lets the IRS know when you deposit more than 10,000 and you have to declare how you came to have the money. Do i tell the IRS im playing online poker..Isn't it still have some issues in the US?

 

[cardplayer52]

I also know that money won is money won. And you should be claiming it whether or not you actually cashed it out.

 

[GeorgeCostanza]

I'm extremely ignorant when it comes to taxes and what not, but I read the link to Mr. Sticker's blog and it said something about claiming losses? Could someone please clarify under what circumstances and how I am allowed to do this.

 

[TinaPete]

wow, great posts you guys. I have nothing to add but thanks for the informing links.

 

[Jodieblonde]

I have no idea but I do know that I won't have to worry about it as making money playing poker will be very few dollars. Nothing to claim as income for sure.

 

[RogueRivered]

There is a lot of misinformation going on around here. I suggest you read the book Mr. Sticker recommended and maybe the web site cited above.

Poker winnings are definitely taxable income, just the same as any other type of income. You can't offset your losing sessions against your winning sessions unless you are a pro. Otherwise you can only deduct your losses if you itemize deductions. Even if you are a losing player, you could have a lot of income to declare (remember, you can't net them out, unless you play poker or gamble for a living). Seems unfair, but it's true.

And reporting income has nothing to do with withdrawing -- it's income the moment you end a winning session. The only trick is defining "session." Usually it's playing one type of game at a given stake. Playing different stakes or games at the same time could be separate sessions.

You can also read all about it for yourself directly from the IRS. Here's the link to IRS Pub 529:

http://www.irs.gov/pub/irs-pdf/p529.pdf -- see page 12.

Dang, that reminds me, I have to get off of here and go finish the taxes that I put off for six months by filing an extension -- due date is Oct. 15th!

 

[StormRaven]

Why not just ask your accountant - whoever does your taxes? Seems a bit suspect to me ask a few different times on a poker forum about this.

 

[Stick66]

You can't offset your losing sessions against your winning sessions unless you are a pro. Otherwise you can only deduct your losses if you itemize deductions.

Just to clarify by relating what I learned in the book (like the example in my review): You can claim your losses, but only up to what you win. That's why you keep track of your winning and losing sessions separately.

--EX#1: Say for the year you have $800 in winnings and $1000 in losses.
You can only claim $800 in losses since you only had $800 in winnings.
You cannot claim -$200 since the Feds don't allow you to benefit from being a bad gambler.
And you don't just claim it as $0 since the figures wash.
You must claim +$800 and -$800.

--EX#2: Say you had 1 winning session all year and you made $5, but you lost $10 each of the other 300 days or sessions you played in the year.
That's $3000 in losses and $5 in winnings.
You can only claim $5 in losses since you only had $5 in winnings.
You cannot claim -$2995, etc., etc., like EX#1.
You must claim +$5 and -$5.

--EX#3: If you have $1000 in winning sessions and $400 in losing sessions, you claim +$1000 and -$400.
NOT +$600 total. The Feds address winnings and losses differently.


Also, log your slots, blackjack, lottery play, etc. It all counts, too. Hope this helps. For more, BUY THE BOOK. It's sooooo worth it.

 

[RogueRivered]

I would say that those 3 examples are true. However, you are claiming your wins as income and claiming your losses (up to amount won) as an itemized deduction. If you don't itemize, you don't get to claim ANY losses. If your income is too high (from all those winning sessions?), your itemized deductions may be limited.

 

[Stick66]

I would say that those 3 examples are true. However, you are claiming your wins as income and claiming your losses (up to amount won) as an itemized deduction. If you don't itemize, you don't get to claim ANY losses. If your income is too high (from all those winning sessions?), your itemized deductions may be limited.

Oh, I see what you are saying now. I even had to check the book to see how it is worded. (I get thick sometimes.)

So for example: If you are in a better position to take the standard deduction on your tax return (since you don't have much to itemize), then you can't itemize your gambling losses. This is because losses would go on Schedule A for itemizing.

So Standard Deduction = No Itemizing = Can't Claim Gambling Losses.

Took me a while to get ya since I always itemize. I haven't taken the standard deduction in almost 20 years.

 

[RogueRivered]

Yeah, you got it now. Funny how as you get older, you have more reasons to itemize. It used to be nice to just take the standard deduction and not worry about it.

What are all these hot-shot college kids going to do? They probably don't have many medical bills, or mortgages, or charitable deductions. Certainly they wouldn't risk not reporting.

Although -- a lot of people don't realize all the ways the IRS has to find out about unreported income. Just having people mad at you who know you have poker income could be enough to get you in trouble.

 

[Dima]

I know this matter pretty well because last 3 years I file tax return as a professional poker player. Recommended reading is the book by Ann-Margaret Jonston, CPA "How to Turn Your Poker Playing Into A Business"
Main points.
1. You must pay taxes on all gambling (poker as well) winnings.
2. If you file as a professional gambler, you can treat your winnings as a profit from trade or business and can deduct your loses from your winnings. Also, you can deduct some gambling related expenses. Just like any other business.
3. To consider yourself as a "professional" you must meet certain IRS requirements, such as: playing regularly, exclusively for profit, spending considerable amount of time on this, and so forth.
4. Otherwise, if you are non-professional player, your must claim winnings form all your winning sessions as income, and report all your loses as itemized deduction on Schedule A. Session definition is pretty vague.
In some cases, your are going to pay additional taxes on gambling winnings, even though overall you lost money this year.
5. Also, you should take in account, that some states have different from IRS regulations regarding gambling income. For example, in Massachusetts gambling loses are not deductible at all. So, if one day your won $1,000, and after, or before that you lost 10,000, you anyway have to pay taxes in full amount on that $1,000. Its weird, but it's so.

If you won in casino and they issued 1099G for you, I would strongly recomend to report it. It's up to you to report online winnings or not, since poker sites don't cooperate with IRS. But if you regularly cashout big into your bank account, it may raise a flag. Banks do cooperate with IRS.

 

[GordonStr222]

Thanks for all the great help everyone.. I think I'm going to read the book you guys recommended.... thanks again...

 

[DaBigBoss]

thanx alot., That was very helpful! So one question didn't get answered though....is it illegal to play poker online in the US..I live in las vegas , nevada and if i withdraw , for example 100,000..am i commiting a crime?

 

[Stick66]

is it illegal to play poker online in the US..I live in las vegas , nevada and if i withdraw , for example 100,000..am i commiting a crime?

No.

 

[Tublecain]

Very helpful post! I've been wondering about this myself. May come in handy next year.

 

[DaBigBoss]

Ok thx alot for that short " no " its just that i've hav'nt heard any recent news on online poker for US players .