Poker - Paying Taxes [Archive]

Expunge

01-16-2004, 03:00 PM

What yoda said.

I would send an email to pokerstars and ask for your balance. If they cant provide it to you, print out the email indicating that you were unable to track the exact amount. From there estimate what you're balance was. I would think this would be good enough to prevent any penalties. Just keep the same estimated balance as your starting point for 2004.

Voter

01-16-2004, 03:29 PM

I doubt that you're expected to report illegal income, but yes, you're supposed to.

Also, pretty much what Expunge said. I wouldn't bother with the email bit, though. I'd just print out my balance as of today, and use that for ending 2003 and beginning 2004 (unless you've had major wins or losses since 1/1/04, in that case use your balance as of today and estimate as well as you can back to 1/1/04).

foghorn

01-16-2004, 03:37 PM

Is there already a thread on the legality/illegality of internet gambling?

Hal Coldvice

01-30-2007, 12:35 PM

Is there already a thread on the legality/illegality of internet gambling?

Yes, there is.

E. Blackadder

01-30-2007, 01:33 PM

IIRC, you are supposed to aggregate your winning sessions for the income number and your aggregate losing sessions for the deduction. This means you don't get to just provide a net, unless you have all winning sessions. In practice, if you itemize the numbers will net out appropriately, but if you rent... no.

or... I could have misremembered this.

Bama Gambler

01-30-2007, 01:50 PM

The real problem is when the AMT kicks in.

Colonel Angus

01-30-2007, 01:51 PM

The real problem is when the AMT kicks in.

and what defines a session.

Judge Dredd

01-30-2007, 01:51 PM

and what defines a session.
this is why I chose to lose last year.

Easier at tax time.

Bama Gambler

01-30-2007, 02:05 PM

this is why I chose to lose last year.

Easier at tax time.even if you lose overall, you still might have to pay taxes depending on how you define your session.

Judge Dredd

01-30-2007, 02:26 PM

even if you lose overall, you still might have to pay taxes depending on how you define your session.
I am aware.

douglan

01-30-2007, 02:29 PM

even if you lose overall, you still might have to pay taxes depending on how you define your session.

not if all your sessions are losing ones. ;)

win diesel

01-30-2007, 02:52 PM

not if all your sessions are losing ones. ;)

lol

In general, thanks for this thread. Always a good laugh...taxes...lol

Arachn

01-30-2007, 02:53 PM

not if all your sessions are losing ones. ;)

that's a problem that I know you have.

hardinda

01-30-2007, 02:57 PM

There is no way to get money on/off poker sites, therefore none of you are winning or losing players as of November. That is all.

win diesel

01-30-2007, 03:03 PM

There is no way to get money on/off poker sites, therefore none of you are winning or losing players as of November. That is all.

This is a good interpretation.

Judge Dredd

01-30-2007, 03:04 PM

There is no way to get money on/off poker sites, therefore none of you are winning or losing players as of November. That is all.
bingo.

And I don't think that is flawed logic.

win diesel

01-30-2007, 03:06 PM

bingo.

And I don't think that is flawed logic.

I'd say for the whole year though. Up 500K in your account...cant get it out. That somewhat unrealized gain is now zero.

Rhizome

01-30-2007, 03:08 PM

Except that you can get money on and off of the sites.

... otherwise, the logic is completely valid, IMO.

win diesel

01-30-2007, 03:17 PM

Except that you can get money on and off of the sites.

... otherwise, the logic is completely valid, IMO.

Just tell them the evil online sites took the money and ran. Then tell the IRS to thank the govt for protecting us against these bad guys cause we can not make decisions on our own.

Anyone paying taxes this year is a life "live one".

Arachn

01-30-2007, 03:33 PM

what about those of us who have our winnings already reported to the IRS for us?

hardinda

01-30-2007, 03:35 PM

what about those of us who have our winnings already reported to the IRS for us?

That's what you get for playing live poker, rigged

Sotally Tober

01-30-2007, 03:35 PM

what about those of us who have our winnings already reported to the IRS for us?
There's a saying about "people like you" being born every minute.

Arachn

01-30-2007, 03:41 PM

Matty

01-30-2007, 03:56 PM

what about those of us who have our winnings already reported to the IRS for us?

:swear:

even I paid taxes to the stupid IRS last year.

win diesel

01-30-2007, 04:02 PM

Harvest Grain

01-30-2007, 04:40 PM

Taxes are the ultimate vig.

In the poker game of life Taxes are the rake.

hardinda

01-30-2007, 05:47 PM

Are Republicans the rakeback providers?

Dr T Non-Fan

01-30-2007, 05:59 PM

What I mean btw are live tournaments - the winnings are reported. (I have 3 or 4 cashes from last year IIRC, only one of any consequence though).

Not cash games, though I have seen people selling racks of bigger denom. chips to other players to avoid a CTR. People pass racks of green around the high-limit area like they are nothing...once saw a guy sell 5 racks to players at my table.

As soon as some casino feels compelled to report my poker "earnings," I'll admit that I won them. I'd like the 1099, or whatever form, to be sent to me as well. Yes, I'm going to be as lazy as the casino, if not more so.
Seems the reporting line is around $600 or so. When I was playing a $60 tourney in Vegas the top prize was $599. The jackpots for straight flushes and 4 o'kinds maxed at $599 as well.

jayhawk

01-30-2007, 06:09 PM

The real problem is when the AMT kicks in.

gambling losses are not subject to AMT

notreallyme

01-30-2007, 06:49 PM

gambling losses are not subject to AMT

They are in Minnesota.

Though I'm not sure what you mean by gambling losses are not subject to AMT. Do you mean the Federal AMT is based on net winnings? And even though that is true you do start losing deductions.

Abstract Actuary

01-30-2007, 07:09 PM

As soon as some casino feels compelled to report my poker "earnings," I'll admit that I won them. I'd like the 1099, or whatever form, to be sent to me as well. Yes, I'm going to be as lazy as the casino, if not more so.
Seems the reporting line is around $600 or so. When I was playing a $60 tourney in Vegas the top prize was $599. The jackpots for straight flushes and 4 o'kinds maxed at $599 as well.

The line is at $1200. Establishments must require tax information for wins of $1200 or more.

Judge Dredd

01-31-2007, 08:59 AM

I still maintain, as I have in the past, that the risk/reward of not reporting gambling income is not worth it for any current, or aspiring, actuaries.

I think that's a "sucker move" to knowingly cheat on them.

That said, I think last year's legislation creates a mirky situation. It specifically restricts financial transactions from gambling websites to US financial institutions. Although the mechanisms are still not in place to enforce this, it would be unlawful for an American to accept a deposit into his account from an online gambling site.

Therefore I conclude that any money left online is therefore lost, and I think it would be safe to conclude the following:

2006 gambling winnings = withdraws - deposits - opening balance

Normally you'd have

gambling winnings = Closing balance - withdraws - deposits - opening balance

but I think with this legislation, you can assume any money left in those accounts as being forfeited. Of course, under this method, a reversal in the law would mean that you'd have to drop "opening balance" from the 2007 taxes.

Then again, I am not a tax expert. It also ignores the fact that we are supposed to be tracking "sessions"...but I also know in the past that those of us who did report our earnings used this method and it was ok.

hardinda

01-31-2007, 09:10 AM

Then again, I am not a tax expert. It also ignores the fact that we are supposed to be tracking "sessions"...but I also know in the past that those of us who did report our earnings used this method and it was ok.

DOH, I just filed my taxes 2 mins ago and put Judge Dredd as my professional tax preparer ... now I'm screwed.

Judge Dredd

01-31-2007, 09:20 AM

DOH, I just filed my taxes 2 mins ago and put Judge Dredd as my professional tax preparer ... now I'm screwed.
getting it in for the Feb 9 refund?

That was a great link, BTW. I checked it this morning to see if I could still get it in this cycle. I'll be submitting tonight also!

win diesel

01-31-2007, 11:16 AM

I still maintain, as I have in the past, that the risk/reward of not reporting gambling income is not worth it for any current, or aspiring, actuaries.

Not any more so for any non actuaries. I thought we officially debunked this losing credentials thing a myth? The IRS treats circus clowns and FSAs the same.

Judge Dredd

01-31-2007, 11:19 AM

Not any more so for any non actuaries. I thought we officially debunked this losing credentials thing a myth? The IRS treats circus clowns and FSAs the same.
its not the IRS that is the problem.

It's the ABCD and (for pension guys) the Joint Board.

win diesel

01-31-2007, 11:30 AM

its not the IRS that is the problem.

It's the ABCD and (for pension guys) the Joint Board.

How/why do those guys get involved?

Judge Dredd

01-31-2007, 11:34 AM

How/why do those guys get involved?
I can't tell if you are being your usual self or if you really don't know.

So I'll just post this for your review, and others, and you can make your own decision:

http://search.yahoo.com/search?ei=utf-8&fr=slv1-wave&p=actuary%20ABCD

win diesel

01-31-2007, 11:50 AM

I can't tell if you are being your usual self or if you really don't know.

So I'll just post this for your review, and others, and you can make your own decision:

http://search.yahoo.com/search?ei=utf-8&fr=slv1-wave&p=actuary%20ABCD

I know what the ABCD is. But I'd be very very surprised if it got into personal affairs.

Judge Dredd

01-31-2007, 01:17 PM

I know what the ABCD is. But I'd be very very surprised if it got into personal affairs.
I've seen it happen.

Most of us actuaries report numbers to the government and to the IRS...how comfortable would my clients be having them report info to the gov't on their behalf with knowledge that I cheated on my taxes? How would that look in court or in litigation if it came to pass that their actuary has a history of misrepresenting numbers from their own financials to the gov't?

I'm telling you man...they don't fool around, and if you are charged with felony for cheating on your taxes, it will be investigated by the ABCD.

Like I said, make up your own mind. With the Patriot Act and all, all these large transactions are going to raise flags. The more you stand to gain by not reporting income, the more likely you are to be caught. The risk/reward of it is just not worth it for anyone who aspires to be credentialed, or is credentialed.

hardinda

01-31-2007, 01:31 PM

or you could just put the blame on the financial institution for allowing the illegal transaction, lol - see how well that flies. Tell them you were just :qunq:testing:qunq: the system.

win diesel

01-31-2007, 01:33 PM

I've seen it happen.

Most of us actuaries report numbers to the government and to the IRS...how comfortable would my clients be having them report info to the gov't on their behalf with knowledge that I cheated on my taxes? How would that look in court or in litigation if it came to pass that their actuary has a history of misrepresenting numbers from their own financials to the gov't?

I'm telling you man...they don't fool around, and if you are charged with felony for cheating on your taxes, it will be investigated by the ABCD.

Like I said, make up your own mind. With the Patriot Act and all, all these large transactions are going to raise flags. The more you stand to gain by not reporting income, the more likely you are to be caught. The risk/reward of it is just not worth it for anyone who aspires to be credentialed, or is credentialed.

Where's Jayhawk?, we need him out here today. I believe he got fired up about this some time ago....you paint a nice picture of the chain of events but still don't think its reality. (Don't get angry or personal...just a debate)

Usual disclaimer, my posts/expert tax advice are for entertainment purposes only. But most here are well paid, so no need to create red flags if you don't want to from a little poker income.

I've never said what I do in regards to taxes...maybe I win at poker, maybe I don't...if I win, maybe I pay taxes, maybe I don't.

win diesel

01-31-2007, 01:36 PM

Although the mechanisms are still not in place to enforce this, it would be unlawful for an American to accept a deposit into his account from an online gambling site.

All the interps I've seen have sort of made it clear that its not unlawful for us to do anything.

hardinda

01-31-2007, 01:42 PM

It's not illegal for an American to accept a deposit, it's illegal for the bank to allow it.

Judge Dredd

01-31-2007, 01:42 PM

Where's Jayhawk?, we need him out here today. I believe he got fired up about this some time ago....you paint a nice picture of the chain of events but still don't think its reality. (Don't get angry or personal...just a debate)

Usual disclaimer, my posts/expert tax advice are for entertainment purposes only. But most here are well paid, so no need to create red flags if you don't want to from a little poker income.

I've never said what I do in regards to taxes...maybe I win at poker, maybe I don't...if I win, maybe I pay taxes, maybe I don't.

Actually, that chain of events is pretty much reality. The ABCD won't care if you are. It's not like they'd read this and find you and go report you. But if you get something like a felony on your record, they might choose to investigate.

For the record....for a pension actuary, you AUTOMATICALY lose your EA if you cheat on your taxes, and you can't obtain your EA if you were convicted of doing so within the last 7 years. There is no review process, or hearing. It says that explicity (but I forget where...in the code i think...douglan??).

I think your basic arguments on why not to report the income basically resort to "i'm not likely to get caught" and "I don't want to create red flags because I am paid well". IMHO, those are pretty poor reasons to back up the argument. Even if the chance was 0.0001%, I would not gamble my career on it. JMO. :shrug:

I've never said you win, or don't win. Or report, or don't report. But there are many who read this who have no money withheld. I feel responsible to present both sides here since we are very flippant with our regard for the IRS. I really don't think its a laughing matter.

Judge Dredd

01-31-2007, 01:43 PM

All the interps I've seen have sort of made it clear that its not unlawful for us to do anything.

It's not illegal for an American to accept a deposit, it's illegal for the bank to allow it.

But my logic still holds, right? For purposes of determining your 2006 gambling wins, one can assume that their end of the year balances are forfeited, correct?

I mean unless the US contents that we can go get the cold hard cash.

hardinda

01-31-2007, 02:07 PM

What end of year balances? I don't play poker.

jayhawk

01-31-2007, 03:34 PM

How about an example...
An EA making $100k makes $4k in poker this last year. The person decides not to report it. They get audited, and the IRS matches that person up with a report they got from a cooperating Pokerstars as part of online poker being regulated and legal. Judge is saying this can be prosecuted as a felony. I think it could, but most likely the IRS would just say pay the taxes and penalty and that is it. When people go to vegas, they normally don't take with them a laptop to record every blackjack hand when it is just entertainment, and I am sure if you claims it was just entertainment, and you didn't even realize you made that much money (or claim you lost it in live games in vegas and you don't owe anything), there won't be any felony convictions and loss of EA liscense going on...

Just my 2 cents. Personally, I report poker winnings on my taxes. If I only made a few thousand a year, wouldn't bother. If you are worried, keep a journal of all of your live game losing sessions you had at your twice a year vegas trips.

SnareSound

01-31-2007, 05:02 PM

It'll all get easier to record when www.sharkscope.gov goes live.

Dr T Non-Fan

01-31-2007, 05:09 PM

My dilemma's non-existence stems from not winning enough. If I ever go over $10,000 in net winnings in one year, I will likely declare it.
That said, I'm more at "hobby" level than "second job" level.

notreallyme

02-01-2007, 12:11 PM

Say you are playing a $25 slot machine and won $10,000 on one pull (got the form) but then lost it all back before even getting up.

How do you file for that? Your 'session' was a break even right?

Dr T Non-Fan

02-01-2007, 12:29 PM

Say you are playing a $25 slot machine and won $10,000 on one pull (got the form) but then lost it all back before even getting up.

How do you file for that? Your 'session' was a break even right?
I'm no accountant.
But the problem I see is that your winnings get declared to the IRS by the casino, and now the onus is on you to prove that you lost it all back.
Frequent-player casino cards probably have such info. Whether the casino wants you to know how much you lost is a different story. You might rethink your next trip, and your whole gambling hobby.

jayhawk

02-01-2007, 01:10 PM

I'm no accountant.
But the problem I see is that your winnings get declared to the IRS by the casino, and now the onus is on you to prove that you lost it all back.
Frequent-player casino cards probably have such info. Whether the casino wants you to know how much you lost is a different story. You might rethink your next trip, and your whole gambling hobby.

Also note this is a big difference from poker, where unless you win more than $599 in a single tournament in a casino, the IRS won't have any financial records of your gambling (at least not any automatically sent to them). Obviously, if you are audited, they may ask for records regarding almost anything. If your lifestyle/spending habits do not match your income/debt level, they will probably ask how you got that extra money.

notreallyme

02-01-2007, 01:45 PM

Also note this is a big difference from poker, where unless you win more than $599 in a single tournament in a casino, the IRS won't have any financial records of your gambling (at least not any automatically sent to them). Obviously, if you are audited, they may ask for records regarding almost anything. If your lifestyle/spending habits do not match your income/debt level, they will probably ask how you got that extra money.
Assume first that $10,000 or $20,000 will not make a huge difference. The money is not needed to pay off anything or buy anthing big, it's just extra 'fun' money. Sure you may buy a kitchen light for $1,000 or something but nothing huge.

Now say (hypothetically) you got $10,000 in slot wins and lost $6,000 of it back. Then took the rest home as cash, never depositing it into a bank account.

So you have a IRS statement for $10,000 (or maybe several of them for different amounts) and you really won $4,000 (or nothing possibly).

What would you put on your tax form? It seems to me this should not be a win offset by a loss (thus losing deductions, and State gets really ugly) but one session that ended in a small win (or breakeven).
So you never had a winning 'session' thus there is nothing to report, but they have these slips (which IMO do not automatically mean you won in any given session).

jayhawk

02-01-2007, 02:47 PM

Assume first that $10,000 or $20,000 will not make a huge difference. The money is not needed to pay off anything or buy anthing big, it's just extra 'fun' money. Sure you may buy a kitchen light for $1,000 or something but nothing huge.

Now say (hypothetically) you got $10,000 in slot wins and lost $6,000 of it back. Then took the rest home as cash, never depositing it into a bank account.

So you have a IRS statement for $10,000 (or maybe several of them for different amounts) and you really won $4,000 (or nothing possibly).

What would you put on your tax form? It seems to me this should not be a win offset by a loss (thus losing deductions, and State gets really ugly) but one session that ended in a small win (or breakeven).
So you never had a winning 'session' thus there is nothing to report, but they have these slips (which IMO do not automatically mean you won in any given session).

If the IRS gets a slip saying you won $10k, then you put $10k in the GI section and your deductions against that in your deductions section. There is nothing complicated about that, and no rules for 'sessions'. If you get 2 of them for $10k in one trip, then you have $20k. You should have proof of the money you lost in case you are audited. You can do whatever you want on your taxes, but some things will look very bad in an audit, or even get you audited. Where I live, you pay state income tax off all the slips, regardless of what you deduct. My partents play $1 video poker twice a month, and get several $4k slip for royals every year (usually 10 or so). Even though they have yet to have a winning year, they have to pay the 3% state income tax on that money.