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I have been kind-of addicted reading across the sites regarding poker taxes. I was listening to Bart Hansen at pokerradio.com and he mentioned you must make a daily log. He mentioned he used the advice from Russell Fox. He also mentioned that upwards of 99% of players are in non-compliance since even losing players must report their daily winnings. He also mentioned virtually all props don't report their poker income. I also heard rumors that some professional poker players, such as Ivey, leave the money in the cage so they won't pay taxes until they actually take the money out. I found two basic articles one written by Fox.
http://www.holdemreview.com/paying-taxes-on-online-poker-winnings/
What Is a Gambling Session?; Federal Income Tax aspects. The actual law:
You must keep an accurate diary or similar record of your losses and
winnings. Your diary should contain at least the following information.
1. The date and type of your specific wager or wagering activity.
2. The name and address or locations of the gambling establishment.
3. The names of other persons present with you at the gambling establishment.
4. The amount(s) you won or lost. There is also another law that 300:1 bets require a W2-G for slots and $5000 for poker tournaments. San Manuel casino does not take out jackpot taxes if the bet by the players does not exceed 300:1. For example if you hit a $30,000 jackpot. If you put $101 in the pot, you will not get a W2-G.
If you go to wikipedia, A diary is a record (originally in written book format) with discrete entries arranged by date reporting on what has happened over the course of a day or other period. The term "other period" could be considered a year.
You pay taxes in a year. Poker is considered one long game. I think common sense would tell you that you need not keep daily records or daily sessions, but yearly sessions. This is only true if you choose not to itemize. If you itemize you can take car payments, computer costs, hotels, and internet access as deductions. Thus more detailed records are necessary.
Thus you only have to record your deposits and withdrawals for online. With the net being the diary of your "small stakes accumulation". To answer the questions, 1. 2008 and poker/casino
2. The places you played.
3. various
4. net win (withdraws-deposits). Put the number on line 21 if positive.
If you happen to hit a jackpot or win $5000 in a tournament you have to report it on line 21 and pay taxes on it unless you choose to itemize. This makes sense since these are large abnormal wins. http://www.irs.gov/pub/irs-pdf/p529.pdf The tax consultants may disagree, but I think if you read the actual laws and try to apply them this method seems to follow the law and makes more common sense. I have no tax training. According to the way Fox views the law, every patron to a casino is breaking the law. Otherwise everyone winners and losers would be recording the slot machine number, blackjack table number, or horse race ticket whether they are winning or not in a notebook. I have yet to see anyone let alone an 80 year old lady with a notepad at a slot machine.
As for live play I think you should take a fixed amount to the casino say $200 cash, and say you come home with $300, then you can write +$100 on a paper and name of casino with date.
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