Income tax on gains in live poker in the U.S.,currently

As is currently the charged income tax on poker winnings in the U.S.?

For example, if i were playing the wsop in Vegas and won a cash prize in the FT as i pay income tax? Be allowed any deduction?

You are required to pay taxes on poker wins in the US.

You have to report your gambling winnings as income (and sadly unless you're playing at underground poker clubs or home games there is a paper trail of your gambling profit/loss stats floating around, so it's a bad idea to not report it). They're taxed at the regular income tax schedule, so unless you're making six figures you'll usually never have to pay more than 20%-ish, so don't worry about that. Once you do that, if you itemize your deductions, you're allowed to write off your gambling losses from your taxes up to a max of your winnings, so that if you had a breakeven or losing year (and no other income) you pay no taxes.

Aleksei said:

You have to report your gambling winnings as income (and sadly unless you're playing at underground poker clubs or home games there is a paper trail of your gambling profit/loss stats floating around, so it's a bad idea to not report it). They're taxed at the regular income tax schedule, so unless you're making six figures you'll usually never have to pay more than 20%-ish, so don't worry about that. Once you do that, if you itemize your deductions, you're allowed to write off your gambling losses from your taxes up to a max of your winnings, so that if you had a breakeven or losing year (and no other income) you pay no taxes.

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Your saying that poker winning should be filed the same as any other king of profit such as a job or something?

A9ofHearts said:

Your saying that poker winning should be filed the same as any other king of profit such as a job or something?

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Pretty much. You report it in your W-2.

http://www.irs.gov/taxtopics/tc419.html

Aleksei said:

Pretty much. You report it in your W-2.

http://www.irs.gov/taxtopics/tc419.html

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Thanks

taxes on poker

actually, I believe you have to file a 1099G or something like that.
You can deduct the amount of any losses incurred equal to the amount of wins.
If you play online and have a room specifically to play online, you can deduct a % from your rent or mortgage. If you play live as a professional, you can deduct travel, meals, buy ins to tourneys etc.

Warning: This is not legal advice and I am not a lawyer.
Unless your winnings are making more than I would guess than about $4k-$7k a year, I wouldn't worry about it.
If you are just raking it from your drunken buddies, then don't worry. I don't see the irs coming after someone over a few K dollars made on the side.
However, if you are living off of or your poker income is your main income then you should report it.
It is taxed at normal income rates.
If you are interested in this aspect and are making a tidy lil sum from the game, talk to a tax attorney or accountant. You can set up a business playing to minimize your tax liability. You would be considered self employed.

the gov. is going to get it somehow they tax you to death then when you get disabled and not able to work they make you fight it so that lawyers get some and then they tax the lawyers in taxes at the end of the year.So yes the gov is going to tax poker thats for sure.

now i can see if you play cards for a living and pay out alot for entries into a game and you win a big some.That it would be right but if your just playing on the weekends with your buddies and friends why even tell the irs you are making money playing cards on the weekends.then its your fault for telling them and if your that crazy then be taxed to death by the gov.

groggy44 said:

you have to file a 1099G

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This is true for most players. I'm not sure of the % it is taxed but you can deduct all gambling losses (and buy ins) provided you can prove them. So save receipts and non-winning lotto tickets.

Pretty sure you would have to file (1099) itemized. But you can also claim all your loses as deductions. Not totally sure about which form you would file though, so it would be best to consult with an accountant. I would love to see some solid numbers on how many times the government taxes each dollar of income generated. I'd bet its somewhere at least around 5$ for every dollar & way more counting indirect taxes like insurance and other mandatory "luxuries". If your not self employed its already been taxed at least 2x by the time you get your check, they tax your companies income which they use to pay you, they taxed your companies suppliers, then they tax you for that same income they already taxed your employer for. If you hire a lawn care service or maid service your already 2x taxed income is taxed again. And don't forget all the special taxes like the gas tax, sales tax, property tax, school tax, vehicle tax, library tax, cigarette & alcohol tax, inheritance tax, capitol gains tax, 911 service tax, cell phone tax, value added tax, luxury tax, gas guzzler tax..... on & on & on. Scratch the 5-1 ratio, its probably more like 20-1 or at least 10-1. I imagine it to be a spiral spinning outward with a single dollar in the center and all the taxes placed on its use spinning out. We are all slaves today considering the Federal Reserve (As Federal as Federal Express BTW) charges the Government interest on every dollar they magically print.

My "itemized deduction list" would be quite interesting to read after a big win! haha

It's a W-2G form, guys. As a taxpayer you don't complete a 1099G (or any 1099x form). A 1099G is given to you by a government office (typically your state) to report any state income tax refunds from the prior tax year, and has nothing to do with gambling. A 1099x form is provided to you (and the IRS) by the entity paying you something considered taxable income. It's not something you fill out yourself. Some casinos might issue you a 1099 to report your winnings, but you file a W-2G when you file your taxes.

OP states he's in Brazil in his profile.....

AugustWest said:

OP states he's in Brazil in his profile.....

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Foreigners are still subject to US taxes on US winnings, 30% in most cases.

Interestingly enough, poker tournaments have a different minimum on reporting ($5000) than cash games ($600 or 300x buy-in) minus buy-in. Here's the relevant sections from the IRS W-2G instructions:

Reportable Gambling Winnings

Report gambling winnings on Form W-2G if:

The winnings (not reduced by the wager) are $1,200 or more from a bingo game or slot machine,

The winnings (reduced by the wager) are $1,500 or more from a keno game,

The winnings (reduced by the wager or buy-in) are more than $5,000 from a poker tournament,

The winnings (except winnings from bingo, slot machines, keno, and poker tournaments) reduced, at the option of the payer, by the wager are:

$600 or more, and

At least 300 times the amount of the wager, or

The winnings are subject to federal income tax withholding (either regular gambling withholding or backup withholding).
...
Foreign Persons

Payments of gambling winnings to a nonresident alien individual or a foreign entity are not subject to reporting or withholding on Form W-2G. Generally, gambling winnings paid to a foreign person are subject to 30% withholding under sections 1441(a) and 1442(a) and are reportable on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, and Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. Winnings of a nonresident alien from blackjack, baccarat, craps, roulette, big-6 wheel, or a live dog or horse race in the United States from legal wagers initiated outside the United States in a parimutuel pool are not subject to withholding or reporting. See Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

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From what I seen, if you hit a $1200 or more payout on a slot machine, it won't pay out, then the attendant comes and gets your SSN and then they give you the cash/check. They report the winnings to the government and at the end of the year the government sends you a 1099.

advoghado said:

As is currently the charged income tax on poker winnings in the U.S.?

For example, if i were playing the WSOP in Vegas and won a cash prize in the FT as i pay income tax? Be allowed any deduction?

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According to my tax guy, there are rules just for poker players making winnings. With a 10 million page tax code, that is not surprising. I did find this:

The myth of withdrawals

There is a myth many online poker players still seem to believe in; that you are supposed to pay taxes on withdrawals. But deposits and withdrawals are not what the IRS is interested in or concerned about. The actual wins and losses are the records you need to keep. This myth probably came about by someone trying to evade their tax burden, thinking that the IRS will have a hard time proving you made money online unless you withdraw it to your bank. While this may be true, it is quite a risk and certainly not advisable.

So if you play a poker tournament on December 31, 2009 and win $300, that $300 is taxable when you file your 2009 income taxes. It does not matter if you leave the money in your account, or even if you lose that money on Jan 1 playing a $300 tournament. The $300 must be reported as income for 2009.

From here: http://www.parttimepoker.com/poker-and-taxes

I would get a professionals help as soon as you win $300.00 or accumulate that much. I do not know if they see a 100 here and there, lose it then end of the year = -0- total, but $300.00 total all year, as you owe or do not owe.

Knowing our system, I would say yes. Yet I do recall maybe professional gamblers can deduct losses in some way, shape, or form. Poker players should also.

Thanks all for the replies, very important information and useful if anyone has anything more to add .. please

now i can see if you play cards for a living and pay out alot for entries into a game and you win a big some.That it would be right but if your just playing on the weekends with your buddies and friends why even tell the irs you are making money playing cards on the weekends.then its your fault for telling them and if your that crazy then be taxed to death by the gov.

babujahan said:

now i can see if you play cards for a living and pay out alot for entries into a game and you win a big some.That it would be right but if your just playing on the weekends with your buddies and friends why even tell the irs you are making money playing cards on the weekends.then its your fault for telling them and if your that crazy then be taxed to death by the gov.

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If you want to commit tax fraud that's your personal decision, but I'd recommend keeping it to yourself. Here at CC we're certainly not going to promote doing so. And calling people "crazy" that want to obey the law is a bit off-sides. Like our tax laws or not (and I do not), it is law, and stating on a public forum that you're blatantly violating them is not very smart, both from a personal legal situation, and as a representation of the poker community which really doesn't need any more bad publicity.