zachvac
Legend
Silver Level
Why? There's no law against cashing checks of over $500 as long as you pay taxes on it. You aren't advocating tax fraud are you?
Why? There's no law against cashing checks of over $500 as long as you pay taxes on it. You aren't advocating tax fraud are you?
DogzBestFrnd
Rock Star
Silver Level
Thanks for the advice.
I was curious about leaving the money in the poker site account because my brother in-law has a checking account in brazil (he goes to school there, US citizen) but he doent have to pay US taxes on the intrest unless he brings the money in to the US.
As far as keeping your own records is there a way I can track it. As of right now I would just be guessing on past tournaments. I know how much I have won (it isnt alot
) but I couldnt say when exactly.
I was curious about leaving the money in the poker site account because my brother in-law has a checking account in brazil (he goes to school there, US citizen) but he doent have to pay US taxes on the intrest unless he brings the money in to the US.
As far as keeping your own records is there a way I can track it. As of right now I would just be guessing on past tournaments. I know how much I have won (it isnt alot
) but I couldnt say when exactly.
B
Brian182
Rock Star
Silver Level
I don't think we should have to pay taxes because the U.S. government makes it hard as hell to even cash out from online poker. Also, I read that the government doesn't care if you have a net loss for the year or quarter. Pay taxes on your net profit, no tax refund if you lose a ton of money. That's not really fair. I don't even think you can use those losses to adjust your net winnings for the next time you file for taxes either. We got all these stupid brick and mortar casinos springing up all over the place, ruining the lives of many people. I know lots of old people that waste tons of money there, yet online is more environmentally friendly as you don't have to go out driving, it's safer too. For those who get away with not claiming taxes on your poker winnings, good for you!
Tammy
Can I help you?
Administrator
I think what he's getting at (it would have been nice if he would have elaborated in his post), is that in some places, you won't get taxed on your winnings if it's under a certain amount. If I remember correctly, here in California, anything you win up to $500 is tax free. After that, you have to fill out a form. I'm guessing they send you a 1099 or something. Could be wrong about that part though.
This is an incorrect statement. You can claim your losses on your taxes. You just have to be disciplined enough to keep a record of your wins/losses.
For the last statement, that's just ridiculous. People who are playing at casinos are (presumably) adults. If they can't control themselves, that's their problem. There are plenty of people out there who can go to a casino, set a limit, enjoy themselves, then go home. I just can't stand it when people see the need to blame others for the problems that they themselves are directly responsible for.
zachvac
Legend
Silver Level
Well unless California has seceded from the union while I was asleep, pretty sure they're still covered under federal income tax law in which case you are actually required to report any winnings whatsoever, not just over $500. Just because you don't have to fill out a form doesn't mean the income you make isn't taxable. Of course this only matters if you actually have a net winning from gambling, which pretty much like 99% of people in California casinos most likely don't.
I think what he mean is that you can only claim losses up to winnings and only each fiscal year. Say you win $40 million in December of one year, then you decide to go have fun and blow a lot of it in a casino the next year. Say you blow $20 million. You're going to have to pay income tax on the $40 million and you won't be able to deduct the $20 million the next year unless you win $20 million+ gambling.
+1.
RogueRivered
Visionary
Silver Level
Unless you're a professional poker player, net winnings isn't the key. You still need to report your winnings; you can only deduct up to the amount of those winnings if you itemize. If you have a lot of winnings and a lot of itemized deductions subject to the 2% AGI adjustment, you really get the short end of the stick.
Zach, do you file as a professional? If you can pull it off, it sounds like a very sensible thing to do, which allows you to deduct other poker-related expenses beyond losses.
Also, how do you think bonuses and rakebacks should be treated? Cash bonuses and rakebacks seem like clear income items to me, but what about Frequent Player Points? I suppose if you can use them to enter tournaments in lieu of an entry fee, then they have an actual monetary value that you should report. You'd know a lot more about all the bonus deals as I've never played enough to earn any!
Your point is? Cheating on your taxes? Risky. I wonder how many U.S. players actually report their winnings as they're suppose to? Probably a pretty low amount. If that's the case, the IRS might just decide to make it a priority in upcoming audits. Since 9/11, it's not so easy to hide money offshore anymore.
zachvac
Legend
Silver Level
Well I know you have to report them, but I meant overall it didn't make a difference in YOUR individual tax amount. Also most people who gamble leave each session with less than they came with. Not too many win $100 at a craps table and decide to quit while they're ahead.
Not last year, but most likely this year. I'm definitely keeping track of what I spend stuff on so I can see how much I can deduct at the end of the year and see if it's worth paying the extra self-employment tax or w/e it's called that your employer usually pays half of.
There was actually some interesting discussion over on 2+2 where a tax attourney actually commented. He basically said that like airline miles, before cashed in, fpps are not subject to taxation. But as soon as they are redeemed (and the income becomes realized, basically can be cashed out), you must pay tax on that. If you use it to buy something, you pay tax on the cash value of that product, whether it's a tourney ticket, TV, or monkey.
RogueRivered
Visionary
Silver Level
I'm not sure I understand what you are saying here. It could make a difference in your tax if you don't itemize, or if you do itemize and lose your standard deduction, or if you've won so much that it makes your Adjusted Gross Income so high that it interferes with some of your itemized deductions subject to limitations.
Oh yeah, self-employment tax; I forgot about that. I guess that means you have to file and pay quarterly, too.
That makes sense, just like if your bank gave you a toaster for opening a checking account -- you count its value as income. (If you don't need a toaster (or a monkey), don't accept it.) They get you every which way, don't they? But you're right, it's not worth the risk to hide income.
zachvac
Legend
Silver Level
Oh that sucks, forgot about that. So I can't really wait until the end of the year to decide which is better, gotta make the decision in April or whenever first quarter taxes are due.
RogueRivered
Visionary
Silver Level
Oh wow, I just noticed you really can buy a monkey; I thought you were joking. Probably can't buy a toaster, though.
HardTheJoker
Enthusiast
Silver Level
I wouldn't advise cheating the IRS. They CAN take everything you own. Well, actually they will destroy it so no one else can have it.
That's a little extreme for poker playing, but it isn't extreme after they catch you cheating them and you can't afford the back taxes and penalties.
I know people who this has happened to. It wasn't for gambeling, but because they couldn't pay their taxes, back-taxes, and penalties; after evading it for years.
That's a little extreme for poker playing, but it isn't extreme after they catch you cheating them and you can't afford the back taxes and penalties.
I know people who this has happened to. It wasn't for gambeling, but because they couldn't pay their taxes, back-taxes, and penalties; after evading it for years.