do you have to report online poker earnings to the IRS?
by poker pete on Monday, September 14th, 2009 | 7 Comments
Jessica G asked:
Do you have to report your earnings from playing poker online to the IRS on your taxes?
Tags: Monies, Chips On Sale, online poker earnings, Online Taxes, Casino token, Human Interest, Internal Revenue Service Do you have to report your earnings from playing poker online to the IRS on your taxes?
If so, is there a designated amount that doesn’t need to be reported – and everything above that does?
If it matters by state – I am curious about California.
Also, the way the monies are received from the poker site are via check.
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Yes. All income, legal and illegal, is subject to taxation.
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I’m pretty sure that it is illegal to gamble online for money in the US, so I would probably not report any of that activity.
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Legally, yes you do. Also, legally, if your winnings are over $600 (total for the year) the site must send you a 1099-misc for the amount you won, and also report it to the IRS.
If you follow the IRS rules for keeping an accurate log of ALL of your gambling activity for the year, and IF you itemize, you can deduct losses up to the amount of your winnings, so might not have to pay tax on the entire amount that you won.
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Technically you are required to report ALL gambling winnings, even if the winnings are from illegal gambling
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Unless your TOTAL income is low enough that you are not required to file, you are legally required to report ALL income. Even if you only make $0.01 form a given source, that penny is supposed to be reported. on-line gabling is not legal in the US, but illegal income is taxable. On-line losses are NOT deductible against winnings because illegal expenses are specifically not deductible.
Judy is correct about losses from LEGAL gambling being an itemized deduction against gambling winnings. Losses from ILLEGAL gambling are not deductible. ALL on-line gambling is illegal under US Federal law.
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all income has to be reported to the irs!!!
Answer to question 1: Yes, you must report earnings above $600 to the IRS.
Answer to question 2: Designated amount is $600.
Random facts that you may need to know about online poker and casino/poker room poker:
#1: Online poker is not illegal in the U.S., only in the state of Washington.
#2: If your TOTAL earnings is above $5,000, the website/casino/establishment is required to give you a form 1099-G that they file with the IRS and you must file with your taxes.
#3: You MUST report any account with a total of $10,000 or more as an “offshore account” to the IRS. It is not illegal to carry a balance on an online poker site, but you MUST report the account to the IRS.
#4: Online gambling is not illegal under US Federal Law under the Wire Act, but the transfer of money from a bank account to an offshore account is illegal. Please read all terms and conditions when signing up for an online poker room, as certain rooms are not regulated by the U.S. Gov’t and THESE are the ones you should avoid and are illegal.
Legal Online Poker rooms in the U.S. (currently):
Full Tilt Poker
PokerStars
Absolute Poker
Ultimate Bet
Bodog
Players Only
Doyle’s Room