correct

 

Originally Posted by r1tony

Why would I pay taxes if I never gave the sites I play on a social security number?!

how do you cash out?

 

Originally Posted by bassmaster

 

Originally Posted by r1tony

Why would I pay taxes if I never gave the sites I play on a social security number?!

how do you cash out?

I am assuming he doesn't.

Duffy how can you not file as a pro? Do you have another source of income that exceeds your poker winnings in terms of money you live off of? I was just at my CPA's office the other day and one of the things he told me to do was to file quarterly and use tax time (April) as a time to "balance the books" instead of just shipping them one massive lump sum then.

The initial advice in this thread was really bad, but by page two, it started to get more accurate. How the IRS wants it reported and what seems right or makes sense are two totally different issues.

All tournament winnings add up towards your gross income. If you entered into a 100 dollar tourney and won 110, guess what? Your gross income just went up 110.00. And this can definitely impact your taxes. An exception to this is live events at casinos in which they issue a tax form (can't remember the number) for which they report your winnings. You can then just use this number towards your gross income, as they have already subtracted the entry fee. Cash games must be tracked as sessions, which you can obtain from the sites. All the winning sessions go towards gross income. This "gambling" income is listed under other income. If you don't think this is a big deal, my gross income was impacted 250K last year.

All tourney fees, losing cash sessions and other gambling losses are listed as expenses. They do impact your net income, unfortunately, not your gross. If you are a recreational player, you CAN deduct these losses. Only professional players can deduct expenses.

Also, income earned is income earned. It doesn't matter if it is sitting on a site or not. So just because you didn't withdraw it, doesn't mean you didn't make it.

Last year, I used Site records, OPR and Pokerdb and my accountant was more than satisfied with the results. Keep in mind, most of your winnings are public record.

I am not a CPA, and this may not be the most accurate, but it is pretty close.

 

Originally Posted by bassmaster

 

Originally Posted by r1tony

Why would I pay taxes if I never gave the sites I play on a social security number?!

how do you cash out?

Full Tilt never asked me for a social. I withdrawl at least once a month.

 

Originally Posted by dills2214

 

Originally Posted by holdplz

if you dont file as a professional gambler, you cannot deduct losses

This is NOT true. (as far as I am aware)

You don't have to pay taxes on all your earnings, regardless of how you got them. You can reduce the amount of money the IRS will tax by reporting your losses as part of your overall itemized deductions. Check out line 28, Other Miscellaneous Deductions, on Schedule A. That's where you report any gambling losses. You can claim up to the total amount of winnings you entered on your 1040, effectively wiping out any taxable gambling income.

If you do not file as a professional gambler, you are unable to claim travel/lodge/food etc as deductions however.

This is 100% correct

 

Originally Posted by TheRealMT

Duffy how can you not file as a pro? Do you have another source of income that exceeds your poker winnings in terms of money you live off of? I was just at my CPA's office the other day and one of the things he told me to do was to file quarterly and use tax time (April) as a time to "balance the books" instead of just shipping them one massive lump sum then.

I only started playing poker for $ in november of 07 I think...and not sure for how much longer i will play.

therefore i have no estimated quarterly tax and not sure how I'll be filing but my brother is a CPA and it sounds like he has it figured out

 

Originally Posted by Duffy08

 

Originally Posted by TheRealMT

Duffy how can you not file as a pro? Do you have another source of income that exceeds your poker winnings in terms of money you live off of? I was just at my CPA's office the other day and one of the things he told me to do was to file quarterly and use tax time (April) as a time to "balance the books" instead of just shipping them one massive lump sum then.

I only started playing poker for $ in november of 07 I think...and not sure for how much longer i will play.

therefore i have no estimated quarterly tax and not sure how I'll be filing but my brother is a CPA and it sounds like he has it figured out

Filing as a pro requires that you pass a certain number of the "reasonableness tests" you can find them on the IRS website, it sounds like you would but just wanted to put that out there for future reference.

 

Originally Posted by lockdownpokah

so what if you have a backer? wouldn't you basically have to go back to what some people are saying and just go by what you cash out? can you file as a professional gambler AND have another job? so young, so confused

theres a couple different ways to look at that but I believe in that case you would consider that a loan from your backer and any profit that you split would be the cost of financiing, so you would most likely only be realizing your half of the profit as income but in order to do that you need to file the sch c as a pro.

 

Originally Posted by kiro15

I know this has been beaten to death and i know there is a link on this site but i still cannot find a specific answer. Say i buy in into a tourney for 10 dollars and cash for 100, i know i have to report the 100 as income. but can i use 10 buyin as a loss of it itemize? or can you only deduct buy-ins as losses in which you didint cash?

I don't think anyone answered this one yet. You made me wonder about the same question so I read the tax Q/A and couldn't find it there either. So I checked with Ann-Margaret Johnston, the woman who wrote the tax stuff section (from www.pokerdeductions.com )

Answer assumes you are a non-pro. (I'm paraphrasing her response here... so in case I write something incorrect it's my error.)

- As long as you are itemizing, the $10 buyin would be listed as a gambling loss whether you cashed or not. You can take it either way.

Ex:
-If you buy in for $10 and cash for $100, you report $100 as income like you said.

If you are able to itemize deductions, then you can report the $10 as a gambling loss. For those unable to itemize, you can't do anything with the $10.

-If you entered for $10 and do not cash, same answer basically. Itemizers get a $10 gambling loss, non-itemizers can't take anything here.