Tax Strategies for professional poker players in the US
I thought it would be a cool idea to start a thread for tax strategies in the US. This seems to be something that isn't really discussed that much or at least finding information on it isn't all that readily available. A lot of stuff out there is about whether you are filling as hobbyist or a professional. Most seems to be geared for the hobbyist, but not as much for the professional. It's my first year filing taxes as a poker player and it is a bit daunting.
A strategy that I plan on using for this year is to use a big buy-in tourney to write off as a business expense. If I cash I get a very nice paycheck and will likely take the standard deduction, but if I bust out then I have the opportunity to itemize for the year and get a bit of a discount on the buy-in. Pretty sure you can't write off buy-ins that you win, but maybe someone more knowledgeable could comment if I'm wrong. Seems like big tourneys could be a great opportunity for cash players. In a way, you're using the variance to your advantage, whereas if you play a bunch of smaller tourneys you are going to even out more often and likely win some of them. In that case you might as well not play any tourneys and just stick to cash games.
I may end up hiring a CPA at some point which will help with tax filling paperwork, but I don't know if they are going to be that helpful in terms of planning in advance hence this thread.
I've filed as a professional gambler for a long time. One key thing anybody with gambling income needs to decide is whether they are a professional or amateur gambler in their tax return.
If one is an amateur gambler, all winning sessions are declared as gambling income. All losing sessions are an itemized deduction up to the amount of wins. This means you have to get past the standard deduction before your losses actually reduce your wins. One advantage of amateur status is that you do not have
this seems like a good post
also like dumbo said i think years ago thre was a huge thread on this
Don't pay any taxes. Odds are against getting audited, you are a gambler for gods sake.
If you get unlucky and actually get audited just pick a country of your liking that doesn't extradite and move before the audit. Maybe pick somewhere with a low cost of living and some nice beaches, you will probably wish you moved sooner.
It's not like the feds will bust down your door and lock you away. Plenty of time to make moving plans after being notified of an audit.
Hope this helps.
Don't pay any taxes. Odds are against getting audited, you are a gambler for gods sake.
If you get unlucky and actually get audited just pick a country of your liking that doesn't extradite and move before the audit. Maybe pick somewhere with a low cost of living and some nice beaches, you will probably wish you moved sooner.
It's not like the feds will bust down your door and lock you away. Plenty of time to make moving plans after being notified of an audit.
Hope this helps.
been filing as a gambler,, thats something you cant do if you have multiple w2g's
Don't pay any taxes. Odds are against getting audited, you are a gambler for gods sake.
If you get unlucky and actually get audited just pick a country of your liking that doesn't extradite and move before the audit. Maybe pick somewhere with a low cost of living and some nice beaches, you will probably wish you moved sooner.
It's not like the feds will bust down your door and lock you away. Plenty of time to make moving plans after being notified of an audit.
Hope this helps.
I don't really want to have to leave the country if I get audited, I've built a life for myself here in the states. I also received a misc-1099 in the mail from PokerStars for around $9,000 so that is already reported to the government. Oddly, I've made about $22,500 on PokerStars not including rakeback. Perhaps the misc-1099 only includes rakeback which would probably be around that amount.
It can be years before you get audited, but if you're caught skimping they can reopen files from previous years. So if I built a paper trail of skimping on taxes for over a decade and I just get audited one year it could cause a chain reaction of massive penalties that would absolutely destroy me. I've also dabbled in crypto currency years ago as well as to this day and so that also increases my likelihood of facing an audit. The one thing I do have going for me is that I'm not a high earner which really helps my chances, but an audit could be really bad further down the road if I chose to cheat. I think I'd rather just do it right for peace of mind.
With AI getting better and IRS funding increasing I believe cheating on taxes will get much harder going forward and people that have been neglecting their taxes could face the hammer. I suppose if you played most of your poker live you could probably get away with not tracking those earnings, but when you have thousands of dollars coming in through Paypal every month that is a paper trail and an auditor is going to try and make your life hell.
How many online grinders in the US are not paying taxes I wonder? If you have another job you probably could slip under the radar, but if it is your sole income perhaps it would raise a red flag.
Live cash grinders can get away wo reporting winnings for years. The occassion 1099 or W-2G they get, they can file as rec and pay taxes on those only. But if they make this their career there is a big gotcha coming. When they hit 65 and realize not only don’t they have any SS credits, they also can’t get free Medicare part A and curr3ntly would pay $6000+/ yr to get it.
Seems like a poor long term choice.
I've been retired, on social security for 2 years. Can I start filing now as "professional gambler"? (With proper records of course)
One strategy to reduce taxable income would be to purchase a 1/8th plane share, perhaps an embracer phenom 300, for around a million dollars with NetJets. You can take a 179 deduction and reduce your income. And if you aren't quite a high-stakes pro making millions you can carry that loss for future years, in case, say your income is only around 700k or something.
If you're a real crusher--like Sean Perry--I would consider an airplane as a sensible tax strategy.
A good accountant with experience will definitely be able to assist with tax planning. But it doesn’t necessarily need to be a CPA. Another option is an Enrolled Agent. Or even just a tax preparer. The key is they have experience applicable to your “business”.
This.
I could not imagine filing my taxes as someone who legally derives most of their income from poker without consulting a professional tax accountant.
Talk to professionals before listening to Randoms on the internet. X100.
I've been retired, on social security for 2 years. Can I start filing now as "professional gambler"? (With proper records of course)
Sure. Retired also but not yet on SS. Because I no longer have my FT job the substantial part of income standard is much easier. Thus even though I am far from a grinder trying to make a career of poker, I now file as a pro.
The orther aspects have to be met but substantial income is much easier w/o a none poker income.
