Winning a tournament & taxes.

[grdred944 0]

It's interesting to read the range of replies here.This entitlement mentality of some is so misguided. You are required to report all gambling winnings. Tournament winnings are reported to the IRS over a certain amount. This does not mean you don't have to report lesser amounts. Granted, I would imagine most people don't but that is the requirement. You may not but if you ever get audited and have that money in the bank you're going to have some 'splainin' to do.It is worth your while to keep a log to track winnings and losses. If you want to get around taxes, invest some of your winnings in tax deferred accounts, securities, etc instead of spending it on bling. As far as the system, I can only imagine how many of the people complaining about paying taxes sat in front of their computer with a bag of chips and a Mountain Dew playing cards instead of voting on election day. I hate the tax code but until enough people force change we're stuck with it.

[Tritz 0]

If you make $600k in a tournament then you shouldn't be complaining about the taxes you lost because you just made 15x what the normal household makes in one year.I agree that taxes suck, but they are a part of life.

It doesn't matter how much you make in any single tournament, that is not the point. What matters is how much they take in taxes. I think if they think they are allowed to take that much of your hard earned money, they are no better than thieves. Because that is what they are, why are they entitled to 40% or whatever is it of your income. (for gambling) BULL SH*T

[shutoutagain 0]

Welcome to the real world. Income taxes are a part of life and are paid by everyone who makes money and wants to stay out of jail. Take a look at your pay stub if you have a job, I agree it does suck. Go a step further and after they take 40% of your winnings up front think about when you start to spend it.Sales tax on everything you buy, property tax on the house, registration on your vehicle etc.......The income tax is just the beginning :evil:

[copernicus 0]

is a payoff of 300-1 or more on any bet, and the withholding amount is 20% of the total payout. Punters know this well, because there is witholding on exotics that exceed 300-1.I would guess that in a tournament the buy in is considered a single bet, so a first place that pays 300 times the buy in or more should be withheld on.That raises the question of the taxes when you are sponsored or you sell off pieces of yourself. Techically you would responsible for the entire tax unless you have a written contract for the sponsorship/sale.

[nicthestick 0]

I'm fine with all of you "No Tax" honks keeping your "hard earned money", as long as you Don't drive on public roads, Don't use public fire and police protection, and Don't send your kids to Public school.

[787style 0]

I'm fine with all of you "No Tax" honks keeping your "hard earned money", as long as you Don't drive on public roads, Don't use public fire and police protection, and Don't send your kids to Public school.

Done, Done, and Done. Can I keep my 40% now?

[marchingant 0]

Maybe I'm a bit off topic here, but this sounds just like Latrell Sprewell arguing that his $14 million contract isn't enough because he has to "feed his kids."Give me a break. While I do think that calssifying people in various tax brackets is a joke, I can't really sympathize with someone who, instead of winning $1,000,000, it only taking home $600,000. Especially when it only cost you maybe $200 to win that much.Anyone who does complain about that just doesn't deserve it, in my opinion.

[KKsuited 0]

A little clarification on what I said earlier. There are a few casino's that do not withhold taxes before you leave the casino, but they are very rare. In general, if you win $1m, you will leave with about $600k.

[KennyEarl 0]

I find this to be a pretty interesting subject, because I'm in this boat (somewhat) for the first time this year. I'm about $12,000 in the black for this year, most of which was the result of a $8K cash in Aruba.My first thought after I collected, was how in the heck do I keep "the man" from taking a big chunk come tax time next year? I've come to the conclusion that it isn't nearly worth the trouble, so I might as well just consult our tax accountant and hope that he can find a way to legitimately acrue some losses that would give me some relief.Perhaps KKsuited can comment on this, but I believe that all financial institutions are required by the Patriot Act to report to the IRS any transaction over $5K now. Since nothing is "really" paid out in cash anymore (except home games), I don't see how you can avoid a maney trail. You're just asking for an immediate audit, and subsequent penalties.

[TexasCoffee 0]

Ever seen what the Gov't pays for a hammer?Can I file a voucher and get paid for the time I spend in traffic on these wonderfull public roads?Can I get a refund when the garbage men spill refuse on my lawn that I have to clean up? Or when the mail is late?I am a combat veteran... Can I get credit in a decent hospital for my back, chest, knee, and ankle damage?We all do our best (including the government) to squeeze something out of life for what is important to each of us... be it family, new toys... or some liberal crusade for an owl. What bothers me is when people (groups) legaly extort money from those who have earned it... and then selfishly use this money to benifit their own agenda; which rarely benefits the original earner...I'm charitable... let me keep my money and I'll use it better.Cheers all!Merry Christmas!!

[scarfire 0]

Thanks for the postings from the few of you related to taxes vs social issues. I am playing in the PP Million IV on Mexico cruise in March 2005. What happens if I win? This money is won in international waters? If you win money outside of U.S. (let's say in Bahamas), does U.S. tax you when you return or Bahamas while you or there or neither?

[KennyEarl 0]

Thanks for the postings from the few of you related to taxes vs social issues.  I am playing in the PP Million IV on Mexico cruise in March 2005.  What happens if I win?   This money is won in international waters?  If you win money outside of U.S. (let's say in Bahamas), does U.S. tax you when you return or Bahamas while you or there or neither?

I cashed in Uruba, which was an UltimateBet tournament, and my winnings were deposited in my UB account, so essentially it was a domestic transaction when I withdrew it.I'm sure the same will happen with PP. ...

[LeeDanger 0]

Here's what I know about taxes on poker winnings. My knowledge is about Canadian law so I'm not sure how useful this information is going to be. If poker winnings make up a substantial amount of your income than it is considered to be an equivalent as a full time job. However, only net winnings are considered. Losses are considered to be "business expenses". I'm not sure on exact figures but there certain percentages of incomoe that is considered to be recreational and "professional". If they are considered to be recreational, winnings are not taxable. Also, there is a gray area about net winnings. If a person turns pro after 5 years of playing, records after that point in time are only considered. What about losses that happened before that person turned pro? Are they to be be considered? Audits are very complicated as well as recordkeeping when it comes to poker.

[Mandelbrot 0]

I did some research on this and this is my current understanding:Income from winning a poker tournament must be declared as "Other Income" and will be so taxed as part of your return at a standard 25%. You can deduct your losses from your winnings here, so it's important to keep a log of your transactions. You should also obtain proof of your winnings and losses, such as emails from the online site, to substantiate your declarations in case you get audited. Most online poker sites are based in off-shore centers where the regulation is light, so they don't normally withold any $$ for you like US casinos will.Then of course you also have state taxes, which must also be declared as "Other Income". In my state, that equates to about a 5% tax.So all told, you're looking at giving at least 30% to Uncle Sam.