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like the title says. If we are suppose to add up our sessions then how do we accomplish this if we get paid every week or so. It would be a pain in the ass to figure out a certain % of the amount of the rake paid in every session.
Help appreciated! -
Posts: 2,107
Joined: Jul 08Sep 14th, 2009 (9/14/2009 11:53am) in reply to rmsapp08
What site are you mostly playing on? If it's FTP, or most other sites, they send you a rakeback transfer every week or something. Just write that number down every week and add it to your profits.
If it's stars it's a little trickier if you end up buying electronics or something (usually a bad idea). Then you're technically supposed to pay taxes on the list price of the electronics (I'm sure most people don't bother paying taxes on anything that's not a cash bonus, but you're supposed to.) -
Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 3:29pm) in reply to rmsapp08
the determining factor will be this...if the site considers rakeback a rebate...then you do not have to count this as income on your taxes....rebates are simply a reimbursement for over payment for a good or service...which is not taxable....im not an accountant, but have an accounting degree and deal with this in the dental industry with rebates on capital equipment
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Posts: 1,637
Joined: Jun 05Sep 14th, 2009 (9/14/2009 3:34pm) in reply to K1d_Gr1nD
in the US all forms of earnings are taxable unless specifically exempted by a tax statute.... I'd lay good odds that rakeback isn't included in the tax regs
however, like K1d said above, if you could get a tax treatment similar to a 'rebate' then you could possibly not claim the rakeback
that said, if it's a lot, have your accountant do it..... they will be most knowledgeable and can argue your position with the IRS if the issue ever came up -
Posts: 209
Joined: Nov 07Sep 14th, 2009 (9/14/2009 3:39pm) in reply to beauright
I do not think this is a very good post
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Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 3:39pm) in reply to beauright
correct, but only if the state has a state income tax....if not, you are dealing with federal income tax laws...i should also clarify...you report the earnings, but itemize deduct them if they are treated as rebatesOriginally Posted by beauright
in the US all forms of earnings are taxable unless specifically exempted by a tax
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And even then ...
Originally Posted by Adam
I would talk to an accountant about this. We never recommend posting in the forums for tax advice, as you can't rely on the advice you're going to get about this stuff from anyone who is not a certified accountant.
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Posts: 28
Joined: May 08Sep 14th, 2009 (9/14/2009 4:35pm) in reply to rmsapp08
I don't think it would be taxable but you would have to reduce your total rake deduction by the amount of the rakeback or rebate.
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I'm not an accountant, but my last accountant did tell me that I had to claim rakeback as it was necessary to determine my yearly income. If a retail store gets a rebate on the price it pays for it's product then it has to claim the different price. Otherwise every vendor would charge incredibly high prices and then rebate them down to the same price they are now and no retail establishment would ever have to pay taxes because they could say "Before the rebates we lost money and we don't have to claim those".
What you can do is claim it against your losses and expenses rather than just paying taxes on your whole rakeback number.
Someone should invite Ann Margaret to this thread, she would actually know the answer. -
Posts: 1,722
Joined: Mar 06Sep 14th, 2009 (9/14/2009 5:28pm) in reply to rmsapp08
Do I have to count dividends from my stocks on taxes? Look, this is how it is, from my understanding, any income is subject to taxation. Sometimes income doesn't even have to be monetary if you read what they list in the tax code. Even if you win a raffle at a church, they *expect* you to count it as income.
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Posts: 404
Joined: Aug 09Sep 14th, 2009 (9/14/2009 7:24pm) in reply to iatetheredcrayon
As an accounting major in my senior year Im taking fed. tax now. Not all income is subject to taxation. Some income is excluded from tax such as gifts, proceeds from insurance etc. As far as your tax returns go, your income would be gains from gambling winnings, so only your profit would be income. im guessing rakeback would be added to income.Originally Posted by iatetheredcrayon
Do I have to count dividends from my stocks on taxes? Look, this is how it is, from my understanding, any income is subject to taxation. Sometimes income doesn't even have to be monetary if you read what they list in the tax code. Even if you win a raffle at a church, they *expect* you to count it as income.
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Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 7:29pm) in reply to STANGAA
Once again...if it is a rebate it is absolutely not taxable...heres a statement from the IRS...but it all depends on if rakeback is considered a rebate...if so...its NOT taxable...
"A rebate received from the party to whom the buyer directly or indirectly paid the purchase price for an item is a reduction in the purchase price of the item; it is not an accession to wealth and is not includible in the buyer's gross income. Rev. Rul. 76-96, 1976-1 C.B. 23; Rev. Rul. 84-41, 1984-1 C.B. 130." -
Posts: 404
Joined: Aug 09Sep 14th, 2009 (9/14/2009 7:36pm) in reply to K1d_Gr1nD
We are not talking about an "item" here. I dont think that rule applies. This would go under gambling winnings, if you did it correctly.Originally Posted by K1d_Gr1nD
Once again...if it is a rebate it is absolutely not taxable...heres a statemrnt from the IRS...
A rebate received from the party to whom the buyer directly or indirectly paid the purchase price for an item is a reduction in the purchase price of the item; it is not an accession to wealth and is not includible in the buyer's gross income. Rev. Rul. 76-96, 1976-1 C.B. 23; Rev. Rul. 84-41, 1984-1 C.B. 130. -
Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 7:55pm) in reply to STANGAA
it doesnt matter about an "item"....the law it written that way so that it doesnt say "items", then people try to find loops holes like "it was only one item, not items"...also, what you are saying is if i buy 1 car and get the rebate it not taxable...but if i buy 10 cars...then the rebates are taxable because its not an "item"...its items...once again...if it is a rebate...it is not taxable...a CPA will be able to tell you exactly how it is classified...Originally Posted by STANGAA
We are not talking about an "item" here. I dont think that rule applies. This would go under gambling winnings, if you did it correctly.
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Posts: 404
Joined: Aug 09Sep 14th, 2009 (9/14/2009 8:20pm) in reply to K1d_Gr1nD
read this excerpt i found onlineOriginally Posted by K1d_Gr1nD
it doesnt matter about an "item"....the law it written that way so that it doesnt say "items", then people try to find loops holes like "it was only one item, not items"...also, what you are saying is if i buy 1 car and get the rebate it not taxable...but if i buy 10 cars...then the rebates are taxable because its not an "item"...its items...once again...if it is a rebate...it is not taxable...a CPA will be able to tell you exactly how it is classified...Originally Posted by STANGAA
We are not talking about an "item" here. I dont think that rule applies. This would go under gambling winnings, if you did it correctly.
Of course if you use the credit card for business, your rebate is a recovery of a tax benefit item so that would be considered income. For example, if you had $10,000 in business purchases and the credit card company refunded you 1 percent or $100, the $100 would be considered income of the business or an adjustment to the cost of the purchases.
same concept, do you think that poker as your primary income would be more like a business, or the purchase or a product? -
Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 8:24pm) in reply to STANGAA
now you are getting into a whole new topic...do you have your poker business setup...i.e I Pwn Donks Inc., etc...or are you a recreational gambler who made some money...this absolutely has an impact...doesnt sounds like he treats poker as a business, much less have it setup as such...probably a consumer who plays poker...thats itOriginally Posted by STANGAA
read this excerpt i found online
Of course if you use the credit card for business, your rebate is a recovery of a tax benefit item so that would be considered income. For example, if you had $10,000 in business purchases and the credit card company refunded you 1 percent or $100, the $100 would be considered income of the business or an adjustment to the cost of the purchases.
same concept, do you think that poker as your primary income would be more like a business, or the purchase or a product? -
Posts: 404
Joined: Aug 09Sep 14th, 2009 (9/14/2009 8:28pm) in reply to K1d_Gr1nD
I assumed the the person asking was a pro, and primary income was poker. If its a recreational player, then hell no, no tax on that.Originally Posted by K1d_Gr1nD
now you are getting into a whole new topic...do you have your poker business setup...i.e I Pwn Donks Inc., etc...or are you a recreational gambler who made some money...this absolutely has an impact...doesnt sounds like he treats poker as a business, much less have it setup as such...probably a consumer who plays poker...thats it
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Posts: 1,003
Joined: Jun 07Sep 14th, 2009 (9/14/2009 9:34pm) in reply to rmsapp08
So if we are claiming our rakeback as income, then shouldn't we also be claiming our rake paid as a business expense?
Ex: I paid $100 in rake today, I recieved $27 rakeback. The difference of $73 is a net loss. How is this income? It seems more like a rebate to me and you should find an accountant that sees it the same way.
That said, I am not an expert. This is the opinion of an average thinking person. -
Posts: 211
Joined: Jul 06Sep 14th, 2009 (9/14/2009 9:41pm) in reply to rmsapp08
I am a CPA who practices taxes....Assuming you are a cash basis, calendar year taxpayer you should include in your gross income all rakeback that you have been paid (credited/set aside in your account) as of 12/31/2009 for your 2009 income tax return.
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Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 9:52pm) in reply to ALoco
if this is the case...then rakeback is not treated as a rebate...rebates are 100% not taxable...Originally Posted by ALoco
I am a CPA who practices taxes....Assuming you are a cash basis, calendar year taxpayer you should include in your gross income all <a href='http://rakeback.pocketfives.com' target='blank'>rakeback</a> that you have been paid (credited/set aside in your account) as of 12/31/2009 for your 2009 income tax return.
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Posts: 211
Joined: Jul 06Sep 14th, 2009 (9/14/2009 10:06pm) in reply to K1d_Gr1nD
Whether you treat it as a tax free rebate or as deducitble expense is a interesting topic. Off the top of my head I do not know the answer, but it is def a very good research question. I would lein towards including the rakeback as income and then deducting the rake paid as a business expense. You at least protect yourself from penalties and interest this way...If it does fall within the scope of a rebate, then you can file a claim for refund and attempt to recover any additional tax paid.Originally Posted by K1d_Gr1nD
if this is the case...then <a href='http://rakeback.pocketfives.com' target='blank'>rakeback</A> is not treated as a rebate...rebates are 100% not taxable...
If you have the cash and want to ensure you are correctly reporting the rebate item you can request a PLR from the IRS, but those tend to be expensive and take a while for an answer.
Whatever you decide to do, you should be consistent with your treatment of the rakeback from year to year. -
Posts: 404
Joined: Aug 09Sep 14th, 2009 (9/14/2009 10:34pm) in reply to ALoco
i knew it was included in gross income, CPA, ftwOriginally Posted by ALoco
Whether you treat it as a tax free rebate or as deducitble expense is a interesting topic. Off the top of my head I do not know the answer, but it is def a very good research question. I would lein towards including the <a href='http://rakeback.pocketfives.com' target='blank'>rakeback</a> as income and then deducting the rake paid as a business expense. You at least protect yourself from penalties and interest this way...If it does fall within the scope of a rebate, then you can file a claim for refund and attempt to recover any additional tax paid.
If you have the cash and want to ensure you are correctly reporting the rebate item you can request a PLR from the IRS, but those tend to be expensive and take a while for an answer.
Whatever you decide to do, you should be consistent with your treatment of the <a href='http://rakeback.pocketfives.com' target='blank'>rakeback</a> from year to year. -
Posts: 1,210
Joined: Mar 07Sep 14th, 2009 (9/14/2009 11:15pm) in reply to STANGAA
you have to see how the IRS classifies it first....Originally Posted by STANGAA
i knew it was included in gross income, CPA, ftw
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Posts: 21
Joined: Jul 09Sep 15th, 2009 (9/15/2009 12:10am) in reply to rmsapp08
Don't claim rakeback as part of income. If anything it is more like a birthday gift from grandma. Your government would just use it for useless earmarks anyways
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This doesn't really make any sense. When you claim your profit, you're claiming an amount that's already less the rake you've paid. You can't then later also deduct the rake as an expense.
Originally Posted by Limo Wreck
So if we are claiming our <a href='http://www.pocketfives.com/visit/rakeback/' target='blank'>rakeback</a> as income, then shouldn't we also be claiming our rake paid as a business expense?
Ex: I paid $100 in rake today, I recieved $27 <a href='http://www.pocketfives.com/visit/rakeback/' target='blank'>rakeback</a>. The difference of $73 is a net loss. How is this income? It seems more like a rebate to me and you should find an accountant that sees it the same way.
That said, I am not an expert. This is the opinion of an average thinking person.
That said, I shouldn't be posting in this thread anything that looks like advice, as I am not an accountant -
Posts: 1,003
Joined: Jun 07Sep 15th, 2009 (9/15/2009 1:58am) in reply to Adam
Good point. I guess that just makes the whole point moot, that rakeback is income. But it is usefull to remain mindfull of the amount that we pay in rake when it comes tax time.Originally Posted by Adam
This doesn't really make any sense. When you claim your profit, you're claiming an amount that's already less the rake you've paid. You can't then later also deduct the rake as an expense.
That said, I shouldn't be posting in this thread anything that looks like advice, as I am not an accountant
The government is taking our tax dollars but is not legalizing and regulating the industry. -
Posts: 236
Joined: Jan 08Sep 16th, 2009 (9/16/2009 12:49pm) in reply to Limo Wreck
For those wondering, I do file as a recreational play, but make good money playing. It is not my "job". I work full time.
I appreciate all of your input. -
Posts: 16
Joined: Mar 09Sep 16th, 2009 (9/16/2009 1:23pm) in reply to rmsapp08
Disclaimer: There may be new IRS regulations or state regulations limiting the amount of gambling losses further that I am unaware of, but I used to be an accountant and this is how it was where I lived when I did it.
You can only deduct for gambling losses to the extent you made gambling. If you won $50,000 in gross winnings for the year which you need declare in your gross earnings, you could only deduct up to that amount in rake. So if you're a losing player, you could only deduct up to your gross winnings that year.
Rakeback merely lessens the amount you can deduct as you have accrued less in actual expenses. So if you won $50,000 gross for 2008, and it cost you $20,000 including rake in losses to accumulate that $50,000, you'd deduct that $20,000.
If later you find out you have $5,000 in rakeback, this merely lessens your total expenses for the year and thus lessening your deduction to $15,000. I hope that makes sense.
Another point worth noting is that you only get to deduct for the gambling losses if you itemize using schedule A. -
Posts: 6,506
Joined: Feb 06Sep 16th, 2009 (9/16/2009 3:31pm) in reply to Adam
And even if they were, that doesn't guarantee anything, either.Originally Posted by Adam
who is not a certified accountant.
We have had plenty of CPAs on this site and the "other" one argue on both sides of tax issues as they relate to gambling.
The general PRINCIPLE of this question, though, is how to treat rebates as income, because that's what rakeback is, in my opinion.
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