Winning a tournament & taxes.

[Tritz 0]

This is a question to anyone who won a real tournament. Let's say you won the WSOP and the 5 mil. What kind of taxes do you have to pay for something like that, and being a pro poker player do you get some kind of break, I would really like to know.

[Red_foot_soldier 0]

i could be wrong but there paid with cash=> no tax

[Jonnydanger 0]

I've wondered that about pro poker players in general. How do you file taxes on winnings? Do you have to keep track of what you win and lose everytime officially? Technically you could have a lose for a year, so what do you pay on a lose? At Foxwoods at least I know if you win over a certain amount on a slot maching or something you have to give x amount in taxes. I don't know if it's different with poker though. Everytime I've gone home with over $1000 I've never been taxed, but then again I didn't win it all at once.

[Tritz 0]

At my casino you have to fill out the W-4 and send it to the gov when you win $1250+So I want to know what kind of taxes a pro has to pay and how that works?

[bdluss 0]

Here is some information on taxes. Yes, poker winnings are taxes as are any other gambling winnings about $1200. This is why you will see some slots that payout $1,199. Typically here is how it works, as a professional gambler (you have to register through the IRS and show I believe 3 years though im not sure on the length there of profit). As a gambler then you basically run your gambling like a business, i.e. keeping track of all wins and losses, expenses for travel, any other gambling losses. The main thing is this, your gambling income is taxed (unless you are a Canadian like Daniel, no taxes for gambling in Canada). Now, for me this year I am not gonna go straight by the book, I am gonna only show my wins that were over $1200. With this I will take off every tournament I ever entered because that entry fee goes down as a loss. Now I should be able to show a "loss" or a minimum gain (like $1k) for the year and only pay taxes on that $1k. I know of several other players (who have made more than me and we are talking in the several 6 figure range) who will do some other things to show losses. For trips to Vegas for example they will go and grab every sport ticket laying on the ground and hold onto that because that is a 'loss' and now can be written off. Also, some who play at a certain casino consistently will play blackjack, buy in for $10k, bet the minimum like $10 bet, play for several hours. They do this they will tell the pitboss to track their play and that they need a receipt for the gambling (usually slip the pitboss $100 or more and) wham all of a sudden now you have a $10k loss. One other quick one, a guy I know has paid a local gas station about $1k to collect all their scratch off losing tickets. By the end of the year it was like $100k 'loss'. The big thing is this, if you have yet to make any substantial $ don't sweat the taxes. But, if you have already made some decent $ find ways to show "losses" on the books and pay a little $ in taxes to the government. If nothing else it shows a good faith effort was made to pay your taxes and you can avoid the pound me in the ass prison for tax evasion.

[RPGs316 0]

Here is some information on taxes.  Yes, poker winnings are taxes as are any other gambling winnings about $1200.  This is why you will see some slots that payout $1,199.  Typically here is how it works, as a professional gambler (you have to register through the IRS and show I believe 3 years though im not sure on the length there of profit).  As a gambler then you basically run your gambling like a business, i.e. keeping track of all wins and losses, expenses for travel, any other gambling losses.  The main thing is this, your gambling income is taxed (unless you are a Canadian like Daniel, no taxes for gambling in Canada).  Now, for me this year I am not gonna go straight by the book, I am gonna only show my wins that were over $1200.  With this I will take off every tournament I ever entered because that entry fee goes down as a loss.  Now I should be able to show a "loss" or a minimum gain (like $1k) for the year and only pay taxes on that $1k.  I know of several other players (who have made more than me and we are talking in the several 6 figure range) who will do some other things to show losses.  For trips to Vegas for example they will go and grab every sport ticket laying on the ground and hold onto that because that is a 'loss' and now can be written off.  Also, some who play at a certain casino consistently will play blackjack, buy in for $10k, bet the minimum like $10 bet, play for several hours.  They do this they will tell the pitboss to track their play and that they need a receipt for the gambling (usually slip the pitboss $100 or more and) wham all of a sudden now you have a $10k loss.  One other quick one, a guy I know has paid a local gas station about $1k to collect all their scratch off losing tickets.  By the end of the year it was like $100k 'loss'.  The big thing is this, if you have yet to make any substantial $ don't sweat the taxes.  But, if you have already made some decent $ find ways to show "losses" on the books and pay a little $ in taxes to the government.  If nothing else it shows a good faith effort was made to pay your taxes and you can avoid the pound me in the ass prison for tax evasion.

However, I think that when it comes to the WSOP Main Event, it's paid in straigh cash, so they get the full $5 mil. However, the first prize purse could actually be more, and they've already accounted for taxes bringing the grand total DOWN to $5 mil. Either way, it's a sweet pay day.

[Sidrat 0]

With school systems and other public institutions that American Citizens need, it's a shame to see so many borderline scams going on.So what if you have to pay 40% tax? It's not like the cost of living is excessively high is it.Side note. 40% tax is what high earners pay (should be) over here in England. Support the future population guys.

[Jonnydanger 0]

With school systems and other public institutions that American Citizens need, it's a shame to see so many borderline scams going on.So what if you have to pay 40% tax?  It's not like the cost of living is excessively high is it.Side note.  40% tax is what high earners pay (should be) over here in England.  Support the future population guys.

Yup, I'm with him. If you are pulling in over 6 figures and still turning tricks so you don't have to pay taxes, then you are a scumbag. I'm not insulting the guy that mentioned all this, he just gave excellent examples of how to work around the system. At the same time though when people skim their taxes and do stuff like that eventually it comes down to hurt the every day guy, me, and that ain't cool. I play poker and gamble at casinos at my own choice, I work 5 days a week and pay taxes because I have to to survive.

[tekn0wledg 0]

Something about that doesn't seem right to me. So I could make 1199 everyday for a year and not claim any taxes? I don't think so.... The gov't would seriously put the smackdown on you for that.Otherwise any gambler would easily win 50k in a night, claim like 3k of it and stash the other 47k somewhere in cash instead of a bank account.

[jklimtsc 0]

You are supposed to pay taxes on tournament winnings as well as any other gambling income. No money is withheld from the pots for tax purposes because professional gamblers are considered self employed. The payout is the total pot but you are still supposed to claim it as income. You can also claim the expenses of travelling to LV, staying in a hotel, entry fees, etc. as well as loses in cash games against your earnings if you are a professional. If you do plan on claiming these types of expenses also plan on claiming your winnings, any self employed person can only show a loss for so long before red flags start going up and there are investigations.

[Sidrat 0]

Sure the IRS might catch up after five years of filing negative income, but by then you'll be taking your millions as well as yourself out to some tropical island that doesn't have an extradition(sp?) agreement.

[jonnyz 0]

HelloGood question, I asked on another forum a while back and below is a summary of the answers I got back....It is taxed, I think it is 30% right off the top so 5mil turns into 3.5mil. Then you can also get hit with state taxes depending where you live. Someone mentioned Canada, gambling winnings are not taxed in Canada however that does not apply to wins outside of the country. Canada and the US do not have a tax treaty so when I win the main event next year:) they will take the 30% before I get my greedy little hands on the money.Jon

[bdluss 0]

I was just showing the varoius ways to get around paying taxes on all of your winnings. I am not saying that you shouldn't pay taxes on anything, cause as the previous post mentioned that would raise red flags. Now, in regards of those making large sums of $, I have no problem with them dodging some taxes and here is why. How many people who gamble and lose and don't repot that on your taxes. I guarantee that number is high because how many husbands wants to tell their wife they lost $5k the past year playing poker online. So since that $ is never refunded in taxes, I have no problem with the winners paying less than the full amount. Also, the people I know making this $ do not come from wealthy backgrounds, so I have no problem with these people using tax loopholes that the wealthy have used for years to save a little $. On a side note, sidrat I actually believe firmly in socialism and hope one day to move to Canada where universal health care and care for the avg. man means something. As for what teck mentioned, if you won $50k in one night, you would have to claim the $50k as profit not $3k.

[Suited_Up 2]

Something about that doesn't seem right to me.  So I could make 1199 everyday for a year and not claim any taxes?  I don't think so.... The gov't would seriously put the smackdown on you for that.Otherwise any gambler would easily win 50k in a night, claim like 3k of it and stash the other 47k somewhere in cash instead of a bank account.

No, you can't do it that way... it should seem a little off. Your taxes go for the whole year, so it's a yearly amount. If you win over $1200 (depending on state) for the year as a whole, then you have to claim tax. It's the same as income... but if you're doing it professionally, you would want to keep track of losses, so you know if you're up or down at the end of the year. Hopefully up... then you would pay the same as a normal job.

[halvey7 0]

I talked to Raymer on PS and asked him about taxes on his 5 mil, and no he didn't get the full 5 mil, this was a while back, and I don't remember the exact numbers, but I remember him saying he didnt get the full 5mil

[JaysonWeber 0]

You can walk out with the Cash... But you still have to claim the winnings on your taxes and the IRS will get there portion, some european countries although don't tax them, so I know one WPT winner, who won I think 1.2 million or something like that, they mentioned he would get all of the money.

[dalchan25 0]

First of all, if your pulling in over 6 figures, you deserve to keep most of your money because you are working your *** off. Money doesn't come easy and juse because your making a lot of it, doesn't mean you shouldn't be able to spend your hard earned cash. I know you should give some back to the government, but giving 48% back, which is what the top 1% of America gives is absurd. Plus the top 1% pay a total of 18% of all America's taxes. It's not right.Secondly, I live in Connecticut and was reading an article with Raymer and it said after all taxes and debts owed, he took 1.7 mil home. I forgot what it was, but he owed some debt. However, after all taxes and excluding that debt, if the prize was 5 mil again, you'd probably take home 2.65 mil.

[JaysonWeber 0]

First of all, if your pulling in over 6 figures, you deserve to keep most of your money because you are working your *** off. Money doesn't come easy and juse because your making a lot of it, doesn't mean you shouldn't be able to spend your hard earned cash.  I know you should give some back to the government, but giving 48% back, which is what the top 1% of America gives is absurd. Plus the top 1% pay a total of 18% of all America's taxes. It's not right.Secondly, I live in Connecticut and was reading an article with Raymer and it said after all taxes and debts owed, he took 1.7 mil home. I forgot what it was, but he owed some debt. However, after all taxes and excluding that debt, if the prize was 5 mil again, you'd probably take home 2.65 mil.

Dalchan, I hate to bring politics into this but... BLESS YOU!! I'm a big republican as well and you're damn right, You should be able to take damn near all of what you earn with your hard time...

[rivercardbandit 0]

Something about that doesn't seem right to me.  So I could make 1199 everyday for a year and not claim any taxes?  I don't think so.... The gov't would seriously put the smackdown on you for that.Otherwise any gambler would easily win 50k in a night, claim like 3k of it and stash the other 47k somewhere in cash instead of a bank account.

No, you can't do it that way... it should seem a little off. Your taxes go for the whole year, so it's a yearly amount. If you win over $1200 (depending on state) for the year as a whole, then you have to claim tax. It's the same as income... but if you're doing it professionally, you would want to keep track of losses, so you know if you're up or down at the end of the year. Hopefully up... then you would pay the same as a normal job.

I cannot speak for other states except my own, Nebraska. We don't have casinos here, but we do have keno parlors, horse racing, and powerball lottery. If your net winnings per bet are more than $1500, a 1099 form is filled out and reported to the state. For instance, you bet a 2$ 5-spot keno ticket which pays $1500 and win, you are clear because the net win is $1498. My wife is a supervisor in one of the keno halls here and people who play regularly keep this in mind when betting. One keno ticket is one bet. You could play 5 tickets with the same numbers in the same game and win a total of $7500 less your bet amount per ticket and no forms are ever filed.That's how it works here anyway. Thought I'd throw that out to you all.

[tekn0wledg 0]

.... Your taxes go for the whole year, so it's a yearly amount.  If you win over $1200 (depending on state) for the year as a whole, then you have to claim tax.

gotcha that makes perfect sense. I must've read the original post wrong, I was like uhhhhh per session? No way!

[KKsuited 0]

This board is slowly becoming one of the rails at the Pokerstars Sunday tournament.Guys, if you don't know what you are talking about, please don't comment on a subject. That's how bad information get out into the world.I'm a CPA in Atlanta, went to high school with Moneymaker and feel very qualified to speak on the subject.1) No, if you win $5m in the WSOP, you do not walk out of the casino with $5m. The casino is required by federal law to withhold the taxes right then. Do you really think the IRS is going to let someone walk out with that much money and hope they honestly file their taxes? Uh, no.2) Professional players can set themselves up as a business and deduct travel and other expenses. Collecting a bunch of lottery tickets and deducting them as losses is a great way to end up in prison. That's one of the oldest wives tales in the book. Some people do it, but if you try it for any kind of large amount of money, you will get nailed. That's fraud which is easy to catch. If you tried to deduct $100k in scratch and play tickets from a gas station, you would find yourself in jail come about April 16th.3) Every casino in the US will have something posted somewhere about the amount of winnings that will automatically have taxes withheld. So yes, theoretically, you could make $1,000 a day and never pay taxes. That's if you don't claim the income. Just b/c the casino didn't withhold doesn't mean you don't have to pay taxes on the money.That's all I can remember from the previous posts. I don't mean to be an ass, but I think we should keep the forum based somewhat on fact, not what everyone "thinks" or what someones buddy told them.

[tekn0wledg 0]

Thanks for some of the clarification.I was actually going to ask my Aunt tomorrow who is a CPA working for the US Treasury in DC.I remember Dan Harrington making the comment when asked at the final table what he did when he won the tournament and he said he took a check. And the other young guns were like "what? i'd take it out in cash." lol.... I figured you wouldn't be able to do that for one, and secondly while that would be cool, man you'd have everyone looking to rob you :wink:

[AceJackSuited 0]

I also can't limit it to just a single player. My dream would be to be at the final table at the WSOP with these 8 players.1. Daniel Negranu2. Scotty Nguyen3. Howard Lederer4. Chris Fergusen5. Annie Duke6. Doyle Brunson7. Marcel Luske8. Dan HarringtonI choose these players because I have great respect for all of them. However, the pro I would most like to bust is Mike Matusow just to get him to go crazy.

[Tritz 0]

With school systems and other public institutions that American Citizens need, it's a shame to see so many borderline scams going on.So what if you have to pay 40% tax?  It's not like the cost of living is excessively high is it.Side note.  40% tax is what high earners pay (should be) over here in England.  Support the future population guys.

How can you say that? If you played your best poker game of your life and fought your ass off and won the first prize $1,000,000. Then some schmuck gives you a check for $600,000, I think you would be just a little mad, no matter what situation you're in.**ESPECIALLY* if poker is your main source of income.

[tekn0wledg 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.