Best way to track online poker income for tax purposes?
Posted by admin
Right now, 100% of my income is from online poker. I cash out $2,000 ever 2 weeks or so and have a check mailed to me. I play Sit-n-go tournaments almost exclusively. If you don’t know what this is, you basically sign up for a small tournament (between 9 and 45 players), and once enough people have signed up to play, it starts.
My question is, what is the best way to track this for my 2008 tax return? I’m sure ideally I would record every single tournament, but by the end of the year I will have thousands of tournament results, but it seems this is rather tedious for both me and the IRS.
Would it be more effective, or legal for me to simply track the cashout checks? Since I’m working with an out of country company, and the money’s not really mine until I have a check in hand I thought this might be ok.
Also, I never make deposits (and actually never have, but that’s another story) if that makes any difference.
May 19th, 2009 at 9:20 am
Online gambling is an extremely questionable legal area. Regulators, frustrated in their failed attempts to block US access to off shore gaming sites, have turned their energy towards attacking banks and individual gamblers.
This being said, it is critical that you file taxes. You would certainly not have a problem simply recording your withdraw checks that you deposit in your bank against any deposits you make in the online poker site.
The IRS cannot see your account balance on the poker site, and since it is operating offshore and by allowing you to gamble, operating illegally, it is in their best interests to keep your account quiet.
Legally, the money in that account is yours, and you should be counting it as income. However, realistically, the IRS can’t see that money, and by reporting your earning checks as income, you will have yourself covered just fine.
May 21st, 2009 at 12:50 pm
I think your method is probably not legally correct but is probably better than doing nothing. At least it shows a good faith effort. I agree that the supposedly correct method is extremely tedious and would probably show you as having about $1 million in income and $900,000 in deductible losses. That seems silly, and would also probably red flag you to the IRS.
May 21st, 2009 at 4:53 pm
Maybe you can find the answers at this poker forum:
i hope this usefully.
May 24th, 2009 at 12:02 pm
You need someone who knows this legal information. Get an attorney or something if you want to find out how to do it so you don’t do it wrong.