Attn: Accountant type people - Online poker and taxes

Any of you learned professionals know if there is anything in place or pending to track online poker winnings? I have only cashed out $600.00, but I know some here and many others have cashed out thousands. I am starting to do well at $3/$6 tables and was wondering if the government will finally catch up with this phenomenon and tax it as well.

I know you voluntarily claim winnings or wait until you get a letter saying what you owe and I assume they get reports from various establishments with names and info on winners which they use to generate the amounts owed in those letters. I also, I know big winnings at casinos, horsetracks, and the like are taxed on the spot over $500.00 or so. How on Earth could they track an offshore or reservation based website? I am sure they can, but are/will they?

These sites are in Canada, Costa Rica, England, etc. They aren’t in the US, they don’t report shit to the IRS. But assuming you want the money to be available to you in the US, you need to put it in an American bank account, and that creates a paper trail.

You are supposed to claim your winnings and be taxed on them. You could probably keep funnelling $600 at a time into your account and never have a problem, but if you get auditted… I can’t see how it’s worth it to cheat on your taxes for like $200. A .0002% chance of getting hit with a tax fraud charge vs. 4 video games?

If you are a big winner, the only safe way to escape taxes is to keep the whole thing entirely offshore. Open an account in some bank-secrecy-heavy country and keep the money there.

keep the whole thing entirely offshore

There’s nothing like spending your Cayman Island gambling winnings on Cayman Island.

keep the whole thing entirely offshore
Considering that now ALL countries except for about 4 (such as egypt and syria where you may not want to do business anyway) have laws that allow their banks to share information with the US government upon request. If you start moving un reported money around in foreign accounts you could be guilty of not only tax fraud but money laundering and a violation of the PATRIOT act as well.

If you really are a winning player and don’t want hassles get some expert tax advice and don’t allow some forum yahoos to tell you how to run your finances.

So this is why your post count has been slowing down.

Hehe. Precisely.

For crying out loud, pay your taxes

I am sure I will. I am not trying to get out of anything. It is sort of irritating that the money I and others deposit from our bank accounts to play with is hard earned money which we have already paid taxes on. There are 50,000 of us on at any one time playing .50/1.00 on up to 30.00/60.00 stakes. I am curious as to how many are reporting their cash outs.

I was just wondering if there were any laws in the books or pending to regulate this burgeoning business.

Are you going to report your losses as well?

Well, I have lost about 150.00 in a casino, but online, I am way up. Never lost my initial 200.00 buy-in.

There are none to my knowledge, but it doesn’t matter. There’s absolutely no percentage in trying to avoid them. Keep accurate records so you can survive an audit.

yuri- Eh, more or less. You have checks sent from the poker site to the bank in Antigua or something, if possible under a fake name, and never have any electronic transactions involving that bank account. It’s incredibly complicated, entirely illegal, but somewhat safe.

If Tyjenks had $4 million or something in profits it might be close to worth it. On the other hand, in Canada gambling winnings aren’t taxed. Moving to Canada and keeping everything legit seems a much better idea than fooling around with money laundering.

I don’t have enough money to keep my Canadian bank account going, let alone one in the Caymans, but this just isn’t true. There are offshore banks in quite a few places that can be used for hiding big bucks. Caymans, Switzerland, Andorra, Panama, Luxembourg, and the Isle of Man are just a few. And a lot of other countries don’t have to provide any client information at all unless there is proof of serious criminal activity, like drug dealing and mob-type stuff.

Which makes sense, because there’s no way that anybody, even in the IRS, is going to blow thousands if not hundreds of thousands of dollars on tracing cash overseas unless the person or company in question was involved in serious law breaking. And there’s pretty much no reason for corporations or even private businessmen to hide money abroad, because there are too many legal ways to “cheat” the taxman with a good accountant to take a risk like this. I’d imagine that offshore accounts these days are only useful if you’re in a drug cartel or are embezzling cash on a grand scale.

You need to report both winnings and losses on your return. If you talk to a tax pro, they’ll tell you that you should track your wins and losses BY SESSION. So if you lose $50 on Monday and win $100 on Tuesday, you need to note both of those events.

At tax time (and this is where I get fuzzy, and why you should find a tax guy who knows gambling tax laws) you sum up all your wins and report it on one line, and then sum up all the losses and report it on a second line. The wins are taxed, and then you get to use the deductions to offset some of the tax hit.

The thing that sucks is that since the winnings are taxed first, you could have broken even for the year and still owe taxes on the $0 net.

You can’t just say “I won $600 this year” and report that. Also, you technically need to claim/pay tax on anything you win, not just money you pull out of a poker room.

That’s the gist, anyway. Find a tax guy who knows how to handle gambling winnings, and even if you don’t have him file for you, pay him to explain it to you in better (and legally defensible) detail.

Oh, yes. you Americans have to pay tax on gambling winnings. In the UK, it’s a completely non-taxable activity. (Which has its own problems for people breeding horses, but that’s by the by. At £80 per hour, thank you very much.)

We probably get taxed on winnings because we have an entire city built around it making more money than most countries.

And such a loverly city it is too!
Link

Link

And such a loverly city it is too!
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The Greatest City in the World!

We probably get taxed on winnings because we have an entire city built around it making more money than most countries.[/quote]

Also betting tax in the UK was only abolished a couple of years ago. It was the responsibillity of the bookie, casino or whatever to collect though, they deducted the tax from your winnings before handing it over, if someone won £50 in a poker game with friends it wasn’t taxable. For some strange reason I never understood, it didn’t apply to bookies who operated at the racetrack either.

To bring this slightly back on topic, the growth of offshore internet gambling was one of the reasons given for the tax’s aboilition.

We probably get taxed on winnings because we have an entire city built around it making more money than most countries.[/quote]

Also betting tax in the UK was only abolished a couple of years ago. It was the responsibillity of the bookie, casino or whatever to collect though, they deducted the tax from your winnings before handing it over, if someone won £50 in a poker game with friends it wasn’t taxable. For some strange reason I never understood, it didn’t apply to bookies who operated at the racetrack either.

To bring this slightly back on topic, the growth of offshore internet gambling was one of the reasons given for the tax’s aboilition.[/quote]

So they abolished the tax so people would gamble in England instead of ‘outside’ of England?

Pretty much yes. Though the quid pro quo was that bookies agreed to pay corporation tax, IIRC.