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
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
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
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
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.
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
Hey there.. any chance you could get me in touch with your accountant? I’m looking to file my taxes as a pro for the first year in the US
I've been retired, on social security for 2 years. Can I start filing now as "professional gambler"? (With proper records of course)
Technically yes. BUT Financially it only makes sense if you have W2G WINNING statements AND you are not currently itemizing your deductions. EXTENSIVE session by session (for cash and tournaments ) contemporanious record keeping is required that should include ALL gaming activity.
Slots, sports, poker they all go into the income or expenses bucket.
Also much of what's been said in this thread is just flat out WRONG. The if you don't itemize and WIN 7,000 In a tournament and spend 20,000 In entries you have a reportable income of 7,000. EXPENSES/ loss have no impact . Also (even though almost no one does) not receiving a W2G doesn't change a win from being TECHNICALLY reportable. If you ITEMIZE you can deduct losses UP TO the amount of your winnings ONLY. You can't create a net loss. Schedule C professional gaming rules can be tricky and a lot of CPA Tax prepares don't really know or understand the IRS code. If you go that route find someone NOW that does so you can do it properly for 2025.
Don't even consider doing it without a HUGE amount of documentation for 2024.
I am NOT NOT NOT a Tax EXPERT but I am a retired CPA.
What? your suppose to pay taxes lol?
i've won like 400k online.. I guess i need to pay them..
I went to the website that Lovethee mentioned and spoke on the phone with one of their CPAs. Unfortunately it was going to cost like $1,400ish and I guess I'm just too cheap because I didn't want to pay that much. I just decided to do my taxes myself and actually used Cash App taxes to speed up the process and it's free. I think doing it myself will be more beneficial going forward so that I have a better idea of the big picture. I feel like my taxes really aren't that complicated. It's just a Schedule C and a few other forms at the end of the day. I think in the end of it all I owe like $5,000ish which is kind of a lot, but I also didn't pay estimated taxes throughout the year so yeah.
Not gonna lie, it was actually a bit fun pulling out the tape measure to figure out the square footage of my poker office. I also got to count my GTO wizard subscription from last year as a business expense, so that was kind of fun.
I remember posting in this thread something about itemizing by playing a big tournament for taxes next year. I feel like I understand taxes a bit better now and realize that that is likely unnecessary/negligible. My fancy PC can be counted as an office business expense and the big tourney (if I choose to play it) can count as a loss on Schedule C and I can just take the standard deduction on the 1040.
I have late penalties which I'll probably receive in the mail from the IRS I'm guessing. Not sure if that will trigger an audit or not. That will suck if it does, but I'll cross that bridge if it comes. I'll let y'all know in the future if that happens.
I used to use Credit Karma back in the day when it used to be a cool website, but they got bought by Turbo Tax one year and became much lamer in various departments. I recommend using Cash App to do your taxes if they're simple.
There is an entire thread about taxes and poker on this site. Someone else may be able to find the link.
Pay your taxes!
Hmmm, I do not know man. That advice does not necessarily apply to all. Some Americans regardless of being audited for years if not decades never have pay all their due taxes.
Indeed. LOL.
Heard the IRS is going on some apology tour and trying to get a better image. So, going forward pay nothing, play dumb if you get caught, and enjoy. They are losing employees by the day anyway. Anyone telling you to pay taxes without knowing your exact situation should be sued for tax malpractice lol.
I've been retired, on social security for 2 years. Can I start filing now as "professional gambler"? (With proper records of course)
Yes, imo. With SS income, you can end up paying a higher marginal rate though, so do some what-ifs. I think Turbotax and others have this capability online.
Not gonna lie, it was actually a bit fun pulling out the tape measure to figure out the square footage of my poker office. I also got to count my GTO wizard subscription from last year as a business expense, so that was kind of fun.
😮
Taking the home office deduction is a bigger red flag than filing as a professional gambler as far as audits go. If you own your home, you have to recapture these deductions when you sell, which makes it not worth it (imo). I guess if you rent, maybe it makes sense.
I remember posting in this thread something about itemizing by playing a big tournament for taxes next year. I feel like I understand taxes a bit better now and realize that that is likely unnecessary/negligible. My fancy PC can be counted as an office business expense and the big tourney (if I choose to play it) can count as a loss on Schedule C and I can just take the standar
Two things. First, it's more important to avoid having taxes withheld from a big score than it is to have a big buyin as an expense. The reason is that the money from the score can be used for buyins (business expenses) for the rest of the year, while money that the IRS is holding is unavailable until the following January at a minimum.
Second, as of the 2018 tax law changes (TCJA), gambling losses cannot be carried forward as a business loss. Expenses such as the training site subscriptions, fractional jet ownership, PCs, etc. can. In any year, you can only use gambling losses up to the amount of that year's gambling winnings as a business expense. But other business expenses can cause you to have a loss for the year and carry it over to the next year.
I used to use Credit Karma back in the day when it used to be a cool website, but they got bought by Turbo Tax one year and became much lamer in various departments. I recommend using Cash App to do your taxes if they're simple.
Yeah Intuit also bought Mint and rolled it into Credit Karma, which sucks. But I've been using Turbotax for so long I feel locked in.
Heard the IRS is going on some apology tour and trying to get a better image. So, going forward pay nothing, play dumb if you get caught, and enjoy. They are losing employees by the day anyway. Anyone telling you to pay taxes without knowing your exact situation should be sued for tax malpractice lol.
Could that work ? Sure. Is it worth the risk ? Doubtful. If you get caught, even "playing dumb" you are subject to Interest and penalties and if they want to be pure jerks because you lied technically jail time (Highly doubtful you truly have to try and hide it AFTER you have been caught and lie to get anywhere near that severe a penalty) Historically it red flags your future year returns which is a continuing hassle. Just pay what you owe and be glad you are a winner.
Taking the home office deduction is a bigger red flag than filing as a professional gambler as far as audits go. If you own your home, you have to recapture these deductions when you sell, which makes it not worth it (imo). I guess if you rent, maybe it makes sense.
I didn't know about this as most non tax professionals wouldn't, but I had Grok fill me in.
Likely most people would take the home expenses route instead of the "simple" method of $5 per sq ft etc. and that would make you subject to this recapture, simple method and you wouldn't. But it's not a huge amount, just the amount of the actual depreciation deduction x the number of years you filed and then pay up to 25% tax on that amount if you sell your home.
Maybe you never sell and maybe Trump abolishes the IRS. lol
Could that work ? Sure. Is it worth the risk ? Doubtful. If you get caught, even "playing dumb" you are subject to Interest and penalties and if they want to be pure jerks because you lied technically jail time (Highly doubtful you truly have to try and hide it AFTER you have been caught and lie to get anywhere near that severe a penalty) Historically it red flags your future
C’mon you are smarter than that — “Historically” means nothing now. I just wanted to give a little tid bit of DC gossip to my gambling bros but please be more craven and alarmist, I hear that’s like catnip to the ladies.
C’mon you are smarter than that — “Historically” means nothing now. I just wanted to give a little tid bit of DC gossip to my gambling bros but please be more craven and alarmist, I hear that’s like catnip to the ladies.
Oh maybe it's just because I am a retired CPA and possibly have some experience in the area. - I am sure you are much more wired in to the DC talk than I am. It is always such a genius move to suggest people knowingly ignore the Federal Tax laws.
Such sage advice you are providing.
https://www.irs.gov/payments/accuracy-re...
Here is a decent recap you might want to also give your "gambling bros"
Oh and as I mentioned and as they say throwing you in jail is rare.... You want to roll those dice ?
"If the IRS believes that your failure to report was intentional, they may pursue it more aggressively. In these situations, taxpayers may face criminal charges for tax evasion. It’s important to note that this is a fairly rare outcome, one that’s reserved for those who know of the filing requirements (or could reasonably be expected to know) and still fail to comply."
Great, for a CPA there’s no client/CPA privilege right? So in theory if a gambler went to a CPA trying to hide gambling wins, that CPA could go right to the IRS, report tax fraud and collect a commission right?
Can you also post some links to current IRS staffing?? Please we need more links!
I actually agree with you if this pre-2017 but I was around for the Koskinen deal at the end of 2016. Now the mantra should be if you ain’t cheating you ain’t trying. Also, you didn’t mention about how the typical pro nowadays has a husband/wife with a W-2 job (Bob Martin Theorem) and that would raise their effective tax rate but if they didn’t report, the spouse’s income/bank account use can give valuable cover.
Thanks for saying you are an accomplished CPA that has had a long vested interest in having consumers pay taxes and use a CPA. Son, this is a gambling forum that promotes vice, if you don’t want to talk about breaking laws go to the Chicken soup for the soul forum but you know that, you got a 2003 reg date.
Great, for a CPA there’s no client/CPA privilege right? So in theory if a gambler went to a CPA trying to hide gambling wins, that CPA could go right to the IRS, report tax fraud and collect a commission right? Can you also post some links to current IRS staffing?? Please we need more links!I actually agree with you if this pre-2017 but I was around for the Koskinen deal
Wow, Do you also cheat when you are playing our "VICE" because you can get away with it ?
Yes, I prefer facts and providing documentation that supports my thoughts rather than simply spouting my opinion - its a novel concept you might try it.
An ethical CPA would advice someone on how to minimize their tax burden not avoid it, but technically you are correct and should use a tax attorney if you want to hide your tax fraud.
Oh, and since you like my links so much as of January 2025 the IRS had in excess of 100,000 employees - I believe that is at or near the all time high https://federalnewsnetwork.com/hiring-re.... That is realistically the high point as DOGE cuts will absolutely impact the audit division and drop the enforcement enrollment.
So yes there likely will be less cops on the street so your chance of getting caught will be reduced. I guess pre 2025 you have been scoping out the retail stores in California so you can shoplift more safely also. I assume you suggested just keeping the total theft under $1,000 - "good" advice.
Because we play poker doesn't mean we necessarily throw our ethics out the the window. Most people play both Cash and Tournaments and some of the income is reported by W2G's so to blindly suggest that NON reporting is an viable option is blatantly wrong both morally and legally.
Just for the record, I said I am a retired CPA not a saint. I have previously noted in this thread that I am NOT a tax Expert. I spent too many years as a CFO and far outside of Public accounting to consider myself "accomplished" just knowledgeable and willing to spend the time to share factual legal insight with others.
Wow, Do you also cheat when you are playing our "VICE" because you can get away with it ?Yes, I prefer facts and providing documentation that supports my thoughts rather than simply spouting my opinion - its a novel concept you might try it. An ethical CPA would advice someone on how to minimize their tax burden not avoid it, but technically you are correct and should use a ta
Ethics and taxes have nothing to do with each other. I agree you should file correctly to avoid any headaches or penalties but that's got zero to do with ethics.
Ethics and taxes have nothing to do with each other. I agree you should file correctly to avoid any headaches or penalties but that's got zero to do with ethics.
Correctly reporting income and paying taxes or not involves ethics
And to the question if confidentiality. While not protected to the degree it is for lawyers and doctors, CPA certainly can be punished for violating confidentiality. Now would he be punished for reporting tax evasion is debatable. OTOH A lawyer could also report this and actually is supposed to if it is an ongoing crime.
Honestly neither ethical CPA nor ethical lawyer would not file such a return. Both could legally be held criminally liable for knowingly doing so.
