Taxes on online winning

any cash out online poker claims over $600 in a calender year by a USA resident has to have taxes paid on it to the IRS.I don't think Canada has to pay if I'm right.Some poker sites have a down loadable tax form for players to use.

this is an intersting thread. I never knew that in the UK they dont have to pay taxes on their gambling income or the aussies either.Sounds pretty good, for them. I think its very confusing for most USA players right now, especially if u only win a few dollars here and there.I dont know too many who bother to claim that, unless i guess u hit a big tourney and win over 3k at once maybe.

WVHillbilly said:

You are required by law to report any and all income to the IRS. Whether it be from poker, mowing lawns, or selling drugs.

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+1, the IRS does not care where the money comes from as long as they get there cut. Hell even comps from a casino are considered earned income.

taxes

you have to pay taxes if you win more than $600. some sites require a w-9 form t send you your money. Just pay it at the end of the year. if you don't make a lot of money at a regular job, it may even increase your refund by moving you into the next tax bracket

kidkvno1 said:

You're best at sending a tax form in. The IRS will Audit you if they see more in your back account then what is on the tax form.
http://finance.yahoo.com/news/irs-audit-red-flags--the-dirty-dozen-194425903.html

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According to my bank any deposit over 5k is reported regardless where it is from.

ibsiegel said:

According to my bank any deposit over 5k is reported regardless where it is from.

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The Federal requirement for mandatory reporting is deposits of $10K or more in cash. Check deposits are not required to be reported, only cash.

However banks also have an obligation to report anything they determine to be suspicious, or if it's obvious you're trying to skirt the law by depositing multiple $9K deposits. So they do have some discretion if they so choose, but I'd be surprised if any bank automatically reports all $5K deposits.

The law also prohibits the bank from discussing the specifics of these policies with you, which is probably why you were told $5K.

Dmorris is spot on for the US requirements. All income from all sources is required to be reported to the IRS. Is does not matter if the amount is high enough result in the issuance of a 1099.

Interesting to hear what the rules are in other countries, though.

W0W where do I get the form??

After reading this thread on taxes and winnings inside the U.S I just relized i should be recording my hands and deposits so i can write them off as a loss

By USA law, in almost all circumstances, you have to pay taxes on any money you make regardless of how you make it. On your taxes you can file it as "other income - gambling winnings" or schedule C business if you think you quality as a "professional gambler". You can arguably save a lot of taxes by filing as pro, but there are some stipulations that you would have to make sure you fit into.

When you file as "gambling winnings", you have to itemize all of your winnings and this net revenue determines your tax bracket. Then you pay this percentage on your gross profit.

When you file as "professional gambler", your tax bracket is determined by your gross profit, not your net revenue.

So this can drastically reduce your tax bracket.


For instance,

if you have $480,000 in tournament buyins, with $500,000 in cashes, your gross profit is $20,000 and your net revenue is $500,000.

When filing "gambling winnings", you would be in highest tax bracket (I think it's 39.5% now).
So you would pay 39.5% of $20,000.

If you file as professional gambler, you would be in a tax bracket $20,000. Which is probably about 10% or 15%, so you would pay 10% of $20,000.


I have filed "professional gambler" and "gambling winnings" in multiple years and I think what I stated was accurate by my accountants, but:
I'm not a CPA or qualified professional, consult your accountant to determine what is lawfully accurate for yourself.

Sorry to hijack the thread, but here in the UK all gambling -- and therefore poker -- is tax free!

OzExorcist said:

Depends entirely on where you live.

If you're American then what WV said. If you're Swedish then you pay an even bigger sum in taxes. But if you're Australian like me then you don't pay any taxes on your poker (or any other) gambling winnings

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Canadians generally don't have to pay tax on their poker (gambling) winnings either. I believe there are situations, though, where a Canadian poker pro may be liable to pay tax on their poker income. It all turns on the facts of the particular case.