RogueRivered
Visionary
Silver Level
Wow, I just heard about the FBAR rule tonight. If you have over $10,000 combined in all your offshore poker accounts, you likely have to file a special form, Report of Foreign Bank and Financial Accounts (FBAR), with the IRS every year or face stiff penalties -- who knew? Luckily, I don't have that kind of money in my poker accounts yet.
WEC
Legend
Silver Level
You had to file by today I beleive....
RogueRivered
Visionary
Silver Level
Nah, it's due by June 30th of the following year.
http://www.irs.gov/businesses/small/article/0,,id=148849,00.html
Regular 1040 taxes were due today if you filed an automatic 6-month extension.
http://www.irs.gov/businesses/small/article/0,,id=148849,00.html
Regular 1040 taxes were due today if you filed an automatic 6-month extension.
RogueRivered
Visionary
Silver Level
Worrying about how much tax you have to pay on your winnings every week?
What a cool problem to have.
If you're in the US, you have to worry about every winning session you have, not how well you did in any given week.
T
Tublecain
Rock Star
Silver Level
So then just to get this straight, if I have a total of $1000 in winnings for the year, and $800 in losses (meaning my bankroll went up by $200), and I don't itemize, I have to pay 30% tax on my total winnings of $1000, which is around $300 dollars... which means that I will have actually lost $100 for the year?
That seems to me like the absolute worst proposition ever. I sure hope I'm missing something here!
That seems to me like the absolute worst proposition ever. I sure hope I'm missing something here!
katymaty
Legend
Silver Level
Thats crazy you could be a big loser all year long about $100,000 then try one last big gamble and chase your losses (not advisable).
YOu manage to get lucky and hit a big streak in the last month or win one big tournament and win $100,000 to break even for the year then end up paying tax on 100K EEK
My advice move to UK they abolished gambling tax years ago
aliengenius
Cardschat Elite
Silver Level
Thats crazy you could be a big loser all year long about $100,000 then try one last big gamble and chase your losses (not advisable).
YOu manage to get lucky and hit a big streak in the last month or win one big tournament and win $100,000 to break even for the year then end up paying tax on 100K EEK
My advice move to UK they abolished gambling tax years ago
No...
You pay tax on you NET winnings: please read above links so as to stop perpetuating these misconception.
That being said, if you were to win $100K in January of the following year you would owe taxes on it (less your subsequent losses in that year), and would NOT be able to offset with the previous year's loss.
RogueRivered
Visionary
Silver Level
You have it right. Unless you itemize, you cannot deduct your losses.
Only if you itemize and are not a pro. You can't net out your sessions and report it on line 21 of Form 1040. You can only add up all your winning sessions, report that total on Line 21, and then IF you itemize, you can offset your losses (on Schedule A) up to the winnings reported on Line 21 of your 1040.
I think people may get confused when you say you only pay on NET winnings. In many cases, effectively, that is correct, but so many losing players assume they don't have to worry about reporting anything on their taxes, and that is simply not correct. Even losing players have to report their winning sessions.
T
Tublecain
Rock Star
Silver Level
So then unless I itemize, I would have to have an ROI of like 200% (MTTs) just to show a sliver of profit after taxes in order to actually make any money at all? That just seems so ridiculous; does it seem that this would change any time soon? I've been playing poker all year hoping that by the end of the year I might be able to have a bankroll that could make me a little bit of extra spending money, but if I'm going to pay more in taxes than I can cash out, then it's not even worth it!
Thanks again,
T.
Thanks again,
T.
RogueRivered
Visionary
Silver Level
Yeah, it's really not fair, especially as compared to the way other hobbies are taxed. But if you cash enough in MTTs, you'd probably have enough wins to make itemizing your offsetting losses worth it.
It's really not fair to pro players, either, since they can never report a loss to offset other income, unlike practically every other type of business.
It's really not fair to pro players, either, since they can never report a loss to offset other income, unlike practically every other type of business.