What is the safe withdrawal amount?

[jebe99]

Let me get this straight. You have a friend who works in the bank, who told you that getting a check from an overseas sportsbook over a certain amount will be reported to the government? However, he didn't bother to tell you what "that amount" is?

He said It can be any amount generally over 2K. Use to be 10K before 911 happened.

He even said that they are trained to report anybody's transactions that they deem suspicious.
Which could mean anything. For e.g., one of the tellers don't like you.....

[LVHerbie]

oh BTW making numerous small deposits to avoid government reporting is also a crime (structuring) and banks are suppose to look for this and report it as well...

http://en.wikipedia.org/wiki/Smurfing_(crime)

[BouncedCheck]

**** the u.s. Government

[ico2525]

As it has been said before on this forum, the IRS is its own entity. If you are a DRUG DEALER, you still have to file a tax return. You might be a violent criminal like Al Capone, but not get charged with any of those violent crimes but tax evasion instead.

Jebe, you are worrying about dollar amounts that are of little concern. Keep making money and live without concern as long as you report your income.

If you get hassled by your bank or some $12/hr bank teller, find a new bank. Most likely they are just jealous. Think about it. One of your $2,000 checks is more than they bring home in a month.

[tullamore]

He said It can be any amount generally over 2K. Use to be 10K before 911 happened.

He even said that they are trained to report anybody's transactions that they deem suspicious.
Which could mean anything. For e.g., one of the tellers don't like you.....

A lot of it has to do with your relationship with your bank. Do they know you, do you bounce check reguarly, do you move a lot of money, etc.

[obama our lord]

my mom works for a bank. After 911 all transactions $10,000 or more are reported to the government. Stay under that and you will be fine.

All transactions over 10,000 dollars have had to be reported for 20 years.

And no, you are not necessarily fine for amounts less than that. Look up the practice known as "structuring."

[xyz]

If you get hassled by your bank or some $12/hr bank teller, find a new bank. Most likely they are just jealous. Think about it. One of your $2,000 checks is more than they bring home in a month.

I never knew that the bank teller makes so little until you pointed it out. In places like San Francisco, $12 is not much higher than minimum wage. Even the branch manager doesn't make that much:

http://www.payscale.com/research/US/Employer=Bank_of_America_Corp/Salary

[MadTiger]

my mom works for a bank. After 911 all transactions $10,000 or more are reported to the government. Stay under that and you will be fine.

That amount was around before 911. After 911, it became ultra-important to enforce it.

[jebe99]

Geez, thanks for all the replies guys.
So if I wanted to set myself up as a prof. gambler and report all my winnings, I would just need to find a good CPA, right? Anyone with real life answers will be appreciated (Durito or DukeJohn, for e.g.).

As I said before, my ONLY concern is that US govt. or IRS could come after people like us in the future, even if we do everything by the book.

Last few years, I seriously thought about relocating myself permanently to another country(ies). This is my sole source of income, and would love to bet sports with total freedom.

Not a fan of govt. that uses Patriot act to limit the freedoms of it's citizens, and bail out the real criminals....the corporations.

[durito]

US citizens living in other countries (i am one) owe full tax on their online gambling winnings. Period.

Yes, I'd find a CPA who knows gambling laws (most don't). It doesn't matter if you are a professional or not, if you have winnings you owe taxes.

[Chuck Luck]

the 10k thing did NOT start after 911. it's always been there.

betjam... get the card. $500 every day. period.

[DukeJohn]

Geez, thanks for all the replies guys.
So if I wanted to set myself up as a prof. gambler and report all my winnings, I would just need to find a good CPA, right?

As I said before, my ONLY concern is that US govt. or IRS could come after people like us in the future, even if we do everything by the book.

If you use a CPA, then any should be able to help. It used to be you could only offset your wins with losses, but not take a net loss. Ironically, it wasn't until a gentlemen fought the IRS on this issue because he claimed he was a professional. Commissioner v. Groetzinger, 480 U.S. 23 at 35-36 (1987) This case went all the way to the supreme court and it was ruled that you can be classified as a professional gambler and your wins and losses are netted, plus many other nice deductions.

The following is from gambling-law-us.com:

There are some caveats to this. Note the usage of full time, with regularity, and production of income for a livelihood. If you gamble in this manner, you can classify yourself as a professional.

Professional gamblers have a business. They file their gambling results on Schedule C. Their wins and losses are netted, they may deduct necessary and reasonable expenses (i.e. mileage and travel, computer ISP, books and other training materials, etc.). However, they are subject to self-employment tax (Schedule SE). That tax (equivalent to Social Security and Medicare) is 15.3% of the first $90,000 of income (2005 limits) and 2.9% thereafter. You do get to deduct half of your self-employment tax as an adjustment to income on line 30 of Form 1040. For some gamblers, it's cheaper (for taxes) to be an amateur than a professional. Talk to a professional tax adviser before making the decision to become a professional gambler. There are several other caveats and limitations.

[jebe99]

Thanks DukeJohn, you're a world of information.

[reno cool]

The SS tax is the killer. The whole thing is a mess. If you're not making a shitload of money you get killed with taxes. Plus you gotto overcome a vig of course.

[DukeJohn]

The SS tax is the killer. The whole thing is a mess. If you're not making a shitload of money you get killed with taxes. Plus you gotto overcome a vig of course.

Just a note Reno... If you work for anyone you pay SS tax... I might add you could fly to wherever Durito lives and discuss strategy and deduct the whole thing as a business expense...

[KKoz9]

US citizens living in other countries (i am one) owe full tax on their online gambling winnings. Period.

Yes, I'd find a CPA who knows gambling laws (most don't). It doesn't matter if you are a professional or not, if you have winnings you owe taxes.

Not disputing the generality of this statement that all income is taxable no matter by what means it was received but I know it's true that international income for a U.S. citizen is not taxable by the IRS (e.g. a contractor that goes to Iraq and is paid by a foreign entity owes no U.S. taxes, no S.S., no medicare, no W/H...that's a fact; being a contractor for the U.S. government or any other U.S. company is obviously different). Therefore, wouldn't the fact that you are not living here make that income tax free since the payments had no ties to U.S. is any way?

[donjuan]

Not disputing this statement but I know it's true that international income for a U.S. citizen is not taxable by the IRS (e.g. a contractor that goes to Iraq and is paid by a foreign entity owes no U.S. taxes, no S.S., no medicare, no W/H...that's a fact)

Source?

[KKoz9]

After looking around, I found that my previous statement was mostly incorrect...the IRS changed that years ago. Damn, I didn't realize how long ago it's been since I was in school. My bad.

"Section 911 allows qualified individuals to exclude by election all or a portion of their foreign earned income from U.S. gross income, and to exclude or deduct certain foreign housing costs. To the extent that taxes paid to a foreign government are allocable to income excluded under Section 911, a taxpayer may elect on an annual basis to take a credit against U.S. income tax either for taxes paid or taxes accrued to a foreign country."

[Enforcer_23]

So the question is, how many actually report each year in full to the IRS ?

[dbartinbwgc]

My Ex worked at a bank and if I remember she said over
5000 they make note or over 10k you have to or they fill out a form
I don't know if they report it.
She also said something like over 3000/5000 if it was a cash transaction.

[acw]

US citizens living in other countries (i am one) owe full tax on their online gambling winnings. Period.

Up till what level can you get away with double taxation laws?

[durito]

Up till what level can you get away with double taxation laws?

I don't know.

But, the IRS considers gambling income to be non-earned. Meaning you can't use the foreign resident income exclusion at all. Where I live (Colombia), does not tax gambling income at all so it's not an issue. Nor do I file taxes here.

[acw]

As an American you are clearly fvcked whichever way you look at it. Personally whatever I make from race tracks, bookmakers or casinos, all is heavily being taxed by their jurisdictions, so there should be no additional income or other gambling tax on it, though court cases only narrowly survived (or did not). It is for that reason that I remain very discreet about my hobby.

[Sawyer]

my mom works for a bank. After 911 all transactions $10,000 or more are reported to the government. Stay under that and you will be fine.

That's right..

Stay Under 10,000.

[durito]

That's right..

Stay Under 10,000.

This is completely irrelevant to anything.