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  • Taxes?

    Anyone have advice on taxes? Does anyone have a good tax expert? Won a few tournaments last year and need some advice on those. Tournaments I've won in the past I feel like I pay a lot of taxes on. Also I am turning pro and could use some tips on what that will entail in the future.

  • #2
    I have a couple tax folks in LA I could recommend, but depending on where you live it might not make sense. You can find them all over if you ask around.

    Records, records, records. Every time you play a tournament, you better keep that receipt or a photo of it. I use Evernote to store all that stuff. For the big wins they'll give you a tax form for it, you'll need that for filing. Every cash game you play you should keep a record too. In the US you pay taxes on winning and losses are a deduction, so you can't just report net amount if you're being up-and-up about it. Also keep records of other expenses like travel and whatnot as that can go towards deductions as well.

    Good luck! A couple friends of mine back in the day had quit being pro solely because they had to pay a few years back taxes after dodging for a while and it destroyed their bankrolls, so do be careful. If you work with them you can pay in installments if you need to instead of bulk.

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    • Danger1916
      Danger1916 commented
      Editing a comment
      I live in LA as well. Would love a recommendation. Thank you.

    • Mayday
      Mayday commented
      Editing a comment
      In the u.s. losses are a deduction for non pros. Pros file schedule c.

  • #3
    Did you keep all of your tournament receipts? As an amateur, you can deduct these.

    If you however file a schedule C as self employed poker professional, you can also deduct mileage, meals, office expenses, poker training expenses. But all of this information must be tracked and logged. Keep receipts for meals while playing. Keep receipts for office supplies purchased for poker, keep receipts for bridge tolls and highway tolls.

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    • #4
      Or move to England, where profits from gambling are tax free

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      • #5
        Thanks for sharing experiences. I work full time (filing as amateur), but had a couple five figure tourney scores in 2018 (paperwork required). I have tourney receipts which I'll deduct from wins, but I also plan to deduct cash game losses. I keep an excel log with session dates, limits, p/l and hours so I can track myself. I would struggle to be able to produce proof beyond that though (no bank transactions as I keep chips/cash in a safe vs. running to the bank every time I go play). Anybody ever get audited and have to prove live cash game losses? Am I worrying too much? I'll still have a fat tax bill because of the tourney scores, which I set money aside for after the wins, but I'd rather not draw any attention.

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        • #6
          I haven't done my 2018 taxes yet, but I'm pretty sure that the income from tournament and cash winnings applies in all circumstances, but that the deductions from entry fees and cash losses only applies if you itemize, and you have to have total itemized deductions that exceed the standard deduction (which has been significantly increased) for the deductions to be available. This is new under the most recent changes to the federal income tax laws. It doesn't apply if you file as a professional, but the IRS takes a very narrow view of who constitutes a professional. If the foregoing is correct, then if, for example, you play in one tournament in which you win $10,000, and you play in 20 tournaments in which you lose your entry fee of $500 each time, then instead of being able to deduct your losses and net out to "zero" as you have in prior years, this year you will have income of $10K but no corresponding deductions if your total itemized deductions don't exceed the standard deduction (or if you exceed the standard deduction by a couple thousand dollars then you just get the deduction of a couple of thousand dollars, incrementally, rather than the whole $10K). This is a big deal for most players, if you have a few significant wins over the course of a year but the IRS doesn't accept your professional status designation.

          As I said, I haven't done my 2018 taxes yet and It is possible that I am just wrong about the above, but if I am right, it has a lot of ramifications for recreational players who occasionally do well in a significant tournament. When I get around to doing my taxes, if what I have said is wrong, I will update my post.

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          • #7
            I use Theresa Fox (in America). She does the taxes of many high stakes poker players and has done amazingly well for me. Tell her I sent you!

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            • Danger1916
              Danger1916 commented
              Editing a comment
              Thank you.

          • #8
            Originally posted by Burying_Luck View Post
            Thanks for sharing experiences. I work full time (filing as amateur), but had a couple five figure tourney scores in 2018 (paperwork required). I have tourney receipts which I'll deduct from wins, but I also plan to deduct cash game losses. I keep an excel log with session dates, limits, p/l and hours so I can track myself. I would struggle to be able to produce proof beyond that though (no bank transactions as I keep chips/cash in a safe vs. running to the bank every time I go play). Anybody ever get audited and have to prove live cash game losses? Am I worrying too much? I'll still have a fat tax bill because of the tourney scores, which I set money aside for after the wins, but I'd rather not draw any attention.
            I play both cash and tournaments. This year I used a tax professional who has knowledge in gambling as the last few years I just filed as an amateur and 2018 was a very good year for me in cash games. I was curious about at what point it would become advantageous to file as a professional. I provided him with excel spreadsheets for both cash and tournaments.

            For tournaments I keep a spreadsheet with:

            1. Date
            2. Location (casino & city/state)
            3. Tournament Description
            4. Buy In
            5. Winnings
            6. Net Result
            7. Hours played
            8. $ per hour

            When I buy in to tournaments I always keep my receipt and if I cash I always ask for a copy of the payout slip. I file this away in order and at the end of the year I make sure they match up with my spreadsheet.

            For cash I keep a spreadsheet with:

            1. Date
            2. Location (casino & city/state)
            3. Limit played
            4. Table Number (I was told this can be very helpful if audited)
            5. Time In
            6. Time Out
            7. Total Time
            8. Total Buy In Amount
            9. Cash Out Amount
            10. Net
            11. $ Per Hour

            I record these on my phone and then update my spreadsheet the next day. According to my tax guy this was adequate enough information if in case I did get audited (I also keep ATM receipts or other receipts to prove I was at a casino if I happen to have any).

            I also have a separate bank account from my family that I put all of my poker money into. When I go to put money from my poker account into my personal account I write a check from this poker account so all money going to my family account has a trail.

            As the year progresses I make sure to add up my monthly totals and put away 30% of winnings into my poker savings account which I use at the end of the year to pay off taxes I may owe on them.

            I will admit, it sounds like a lot and I probably go over the top. But I want to make sure all areas are covered when it comes to taxes. As long as you have nothing to hide, there is nothing to worry about.

            Take the extra time to file, record & report everything and you will have nothing to worry about.

            It also helps having the help of a tax professional who has knowledge in the gambling area. It was well worth the additional cost for me.

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