ehp- is it illegal to gamble online? would they arrest you if they knew this? that is the difference between gambling and being a drug dealer or hit man. to compare the 2 is comical. if you were running a gambling opearation that would be differnt. just wagering? you will not get in trouble for reporting that.
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I'm may not be 100% correct on this but it isn't that simple. If you have an honest
40k job and win 50k, you fall into the 90k tax bracket. Lets say you lost 50k in gambling that year as well and claim it, it still isn't even steven. You are still paying a higher tax bracket, right?Comment -
Pockets89.....if you cash for a reportable amount (300-1 on investment or 10,000 straight cash) in Vegas, then you pony up your Driver's license and SS card and they record your info so they can report winnings to IRS and you will receive W-2G at year's end. In this situation yes, you to need to claim on your taxes. Now technically, the last time you won $25 playing slots were you supposed to claim it? Yes. Did you? No.....is the IRS going to come knocking on your door? No.....so this is more of a moral not a legal question......and it's a grey area.....for instance...the speed limit is 55....so if your doing 56 than your breaking the law....when was the last time you broke the law? Ummmmmmmm today....is a cop gonna pull u over and give u a ticket for breaking the law by speeding a few miles over? No....it's called discretion....and the same applies here...like I said in an earlier post....if your making mad coin..the kind that should be reported as income....than stop sending your money to some 3rd world country via **, move to Vegas, and report your income as a professional gambler........
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Its not "comical" though I admit a little dramatic, but I was just trying to make a point, which is why would you report winnings from something your not allowed to do in the 1st place? Again, in my opinion this is a moral not a legal question. if you are audited, they look at recorded earnings (from your employer, investment firms, etc) versus what you reported on your tax return and reconcile the 2.....since payouts from offshore are not "REPORTED" it becomes a moral question. this is just my opinion, everyone is entitled to there own
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OK, everyone is getting some very bad advice from ehp6737.
First, placing wagers online IS NOT ILLEGAL. There are bills being tossed around trying to either make it illegal, or figure out a way to regulate it, but for now, it is legal. (there is another thread on here where we discussed this). It is legal income, and you have to pay taxes on it. All of your winnings, not just withdrawals. As explained above, you have to detail on your tax return $100k in winnings, $99k in losses, $1k net winnings, for example. I almost peed myself when I saw ehp6737 compare gambling winnings to drug sales. What a joke.
Also, you are NOT supposed to claim winnings on the $25 you used in your example above. There is a limit, as long as you are below that, you owe nothing (forgive me, I forget the limit). If you win over that limit, that is when the casino marches you over and takes your ID and SS# and gives you a pretty little W2-G: http://www.irs.gov/pub/irs-pdf/fw2g.pdf. If you win $25 on slots, Uncle Sam doesn't get any of it.
PAY YOUR TAXES. TRUST ME!!!Comment -
steve-what you say sounds right you can still have to pay taxes even if they dont give you forms. if you make 500 bucks a night playing poker at a casino, they wont give you forms. but thats still taxable. no?Comment -
When it comes to taxes, legality of the source is irrelevant, it is still income.
And tax authorities don't rely simply on reporting. If you are investigated you may well be called on to show where all your money has come from.
And contrary to what some have posted, it is the amount you win or lose which is relevant, rather than whatever amount you have chosen to withdraw or deposit.Comment -
Miek, it sounds like the scenario you are describing is of a professional player. In that case, you need to track all winnings and losses in detail, and report at the end of the year. As far as the limits, here is what I found through a quick search.
Gambling winnings that exceed $5,000 are subject to income tax withholding when they were won from a sweepstakes, a poker tournament, a wagering pool, the lottery, or any other wager if the gain is at least 300 times the original bet.
If you ever find yourself a big winner after gambling, and do not provide your social security number to the payer, they may be required to withhold 28% of the winnings for taxes. This rule applies to $1,200 or more from slot machines or bingo, $1,500 or more from keno, and other gambling winnings in excess of $600.
Obviously, this only applies to US establishments, so our offshore books won't follow the above.Comment -
hareeba- i would argue that point. what if you are never able to withdraw the money? what if you turn 500 into 10,000 in an account but there is still 100,000 in rollover required? what if its a scam book?Comment -
good questions
firstly, if you are dudded by a scam book it seems pretty clear to me that you have suffered a loss which you should offset against any gains you have recorded
on the other question, I would suggest that you would have a sound argument to defer the recognition of any gains until they are unconditional and available to be withdrawnComment -
my argument with this industry would certainly be that gains are not recognized untill the check clears. i know the rules (when earned) but getting paid in this industry is often harder then picking the winners.Comment -
depends if you are pro or notComment -
I suggest you avoid the dodgy books then.
Touch wood, but I've never suffered a loss due to a bookie failure to pay.
Sure; I've had a few arguments with them over rules and the like but never had one unable to pay out my balance.Comment -
ehp is an idiot of the highest order.Comment -
So if you make a loss one year of $50,000 do you submit your loss and carry that over to the next year?
This all seems a little absurd to me but we don't pay any taxes unless your main income source is gambling - but even Aussie Joe Hascham who won the World Poker tourny some years back did not pay tax on the win (he went to great lengths on Letterman and other shows to say he was a mortgage broker who did gambling as a hobby).
Apart from not having to pay, Australians tend to think they pay enough taxes anyway - so they are buggered if they are going to pay any extra (we are convicts after all).
I find the honesty of it all amusing - why declare taxes on winnings from offshore accounts? It shouldn't be traceable anyway - if it is then get yourself an offshore bank account.Comment -
No, the way the tax law is written, you may only write off losses up to the amount of winnings you claim in that year. There are no carryovers for losses.
Look, if you work full time and pull out $500 here and there as play money, you're right, no one would probably ever notice. BUT, if this is your primary source of income, and you don't claim it, someone will start snooping. And their first question will be "how can you afford your current standard of living even though you claim no income?" How do you answer that question? If you tell the IRS that you don't make squat, then you better be living in a cardboard box and eating out of trash cans.Comment -
I have always wondered this myself. What if you go to a race track and make 500 dollars every night. Since its under the amount that needs to be reported each night what would you do then? I'm sure the IRS would eventually see someone making 100+ thousand and question it. Ahh i hate how the US works. So taking the above example into account with offshore books. What if you make 500 dollar withdrawals every 2 days. That's still a considerable amount of income. What would be the correct scenario on this?Comment -
Declare and pay your taxes in both. There are no other issues to worry about. All this QQing nonsense is derived from people who are either 1) idiots 2) criminals. Those are not mutually exclusive. If you do not pay your taxes, you run a significant risk of being popped for tax evasion which is a way many actual criminals get caught for their criminal silliness.Comment -
Not entirely correct.
IF your gambling constitutes a BUSINESS (and that's a whole topic in itself) it matters nought if it is your 'main income source' or not. There is no such thing as a 'main income source' test.
And it really would not be too difficult for the taxman to trace your offshore gambling activities if you are subjected to an investigation.Comment -
Different countries = Different rules
I do not know and do not need to know US tax law. I do know the Australian tax laws.Comment -
I know enough!
And over 50% of income from gambling is would technically qualify as a 'business'. But it is a grey area with few test cases and very few Aussies will put their hand up to pay tax on this.
I understand what you are saying but the only point I wanted to make was that Aussies in practice don't pay tax on gambling winnings.Comment -
You make a compelling argument!Comment -
Thanks for the huge information, actually I don't know about this. Thanks for add some more useful stuff in my mind vocabulary.Comment -
The big issue is the checks deposited into your account. Call me criminal if you want, but if I make cash each night at a poker room or racetrack with no IRS form, I would never claim any of it. Just don't deposit the cash into your bank account and there is no trail. But, the check withdrawls from Bodog and other books have to be deposited into a bank, and there starts the paper trail. I pay taxes on my job, house, and everything else. But as far as my gambling hobby, all I care about is staying out of trouble.Comment -
This is straight from the IRS website. http://www.irs.gov/publications/p17/...link1000172104
A couple probably apply to some in the forum
Hobby losses. Losses from a hobby are not deductible from other income. A hobby is an activity from which you do not expect to make a profit. See Activity not for profit , earlier.
I gamble as a hobby with the intent to make profit though,
Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.
Ok, but can I deduct the losses from when my drugs were seized at the airport?
Interest on frozen deposits. In general, you exclude from your income the amount of interest earned on a frozen deposit. See Interest income on frozen deposits in chapter 7.
Gee thanks, like I'll ever see a cent of that money again anyway.
Kickbacks. You must include kickbacks, side commissions, push money, or similar payments you receive in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040), if from your self-employment activity.
Doe's this include referral bonuses?
Prizes and awards. If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $50 prize in a photography contest, you must report this income on Form 1040, line 21. If you refuse to accept a prize, do not include its value in your income. Prizes and awards in goods or services must be included in your income at their fair market value.
Oh, great, I never did claim the tv that I won.
Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.
Supposedly, they are not supposed to report you.
Signed,
Al Capone
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Gambling winnings. You must include your gambling winnings in income on Form 1040, line 21. If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. See chapter 28 for information on recordkeeping. Lotteries and raffles. Winnings from lotteries and raffles are gambling winnings. In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes.
If you win a state lottery prize payable in installments, see Publication 525 for more information.
Form W-2G. You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. Include the amount from box 1 on Form 1040, line 21. Include the amount shown in box 2 on Form 1040, line 61, as federal income tax withheld.
Chapter 28: Gambling Losses Up to the Amount of Gambling Winnings
You must report the full amount of your gambling winnings for the year on Form 1040, line 21. You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. You cannot deduct gambling losses that are more than your winnings.
You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.
Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.
Your diary should contain at least the following information.
- The date and type of your specific wager or wagering activity.
- The name and address or location of the gambling establishment.
- The names of other persons present with you at the gambling establishment.
- The amount(s) you won or lost.
See Publication 529 for more information.Comment -
Luckily I don't have to worry about this bullshit but I would suggest going to the race tack and collecting losing tickets.
Withdraw money that you are going to claim as lost and stick it under the bed.
Write yourself up as a break even punter.
I doubt they can do shit about it either.Comment -
What is taxes? LOL, if you are w/d less than $2000 a week you don't have to claim taxes. What you should do is make a deal with your book that you want those MU to go to your friends names. Spread the wealth and not have it trailed all back to you. Give your friend some kickback on the side for the hassle of receiving the money.Comment
