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I can’t say I’m very surprised to hear it, but today it became official. Neteller is rolling over to save itself from the headache and expense of a fight with the DOJ. Neteller issued a press release today. The lowlights are the ...
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What do you think about completing taxes for gambling for 2006 if you actually had a loss for the year? Neteller figures show a positive figure, but as we all know that was not the only funding source. If not filing as a professional (obviously :)), am I going to get screwed by having to itemize deductions, etc?
[...] post by Ed Miller and software by Elliott [...]
Eric,
I want to nip this in the bud. You (and everyone else) with tax questions needs to talk to a PROFESSIONAL. Find a qualified CPA and/or tax attorney to answer your questions.
Seriously. Don’t screw around with taxes and the IRS. I’m not qualified to give tax advice, and honestly, neither is anyone else on an internet forum or blog.
I see guys ask questions on forums all the time, “I’m planning to cheat on my taxes this way. Can I get away with it?”
Honestly, asking questions like that is pretty dumb (not saying that’s what you did, Eric… just see a lot of people do it). If the IRS wanted to subpoena, say, 2+2 and ask for info on everyone who said they planned to cheat on their taxes, they would have info against a lot of people.
If you have tax questions, you have to talk to a tax professional. There’s really no reliable shortcut.
Ed,
Thanks for the response. I really had/have no intentions of cheating on taxes. I agree with you about these types of questions on forums and such. Just a quick question looking for your perspective on this. But I understand fully your response and think it is good advice.
Eric,
Even if you had a loss, you need to report it. Add the sum of your winning sessions as additional income, and (if you itemize), the sum of your losing sessions (not greater than winning sessions) as an itemized deduction.
Even with net losses, you may owe tax. However, you still need to file this way, because if you are audited, this is the way they will see it.
Good luck,
TS
It sure looks like the government is dead serious about stopping us from playing online poker. They’re going to do everything within their power to make it as difficult as for us possible.
Well, so much for poker. It looks like I’ll just have to find another retirement hobby. I’ve still got a few years left, I’m sure I can find something else…
I think poker is getting caught up in the SportsBook betting net, but the Feds are caught up in catching the sports betters to not catch the poker players. Of course a poker deposit and a sportsbetting deposit to Bodog or Mansion are identical from looking at Neteller’s records.
TS - I’ve heard that the way to correctly claim poker results on your taxes is to claim each table session that is profitable. Of course that would increase the amount you are taxed against because you’re losing sessions wouldn’t be subtracted, but again as Ed says, I’m not a tax expert. This is a question for someone you are paying to do your taxes, not your ‘invisible internet friends.’
Pokerstars are accepting payments from Moneygram. Do you think this is a long term solution? Isnt Moneygram risking Neteller’s fate?
Meek said: “I think poker is getting caught up in the SportsBook betting net, but the Feds are caught up in catching the sports betters to not catch the poker players.”
I don’t think any real distinction is being made between poker players and sports betting etc. It’s all gambling as far as the Feds and most non-poker players are concerned. If you try to make people understand the difference, you are requiring them to think and that is something that most people don’t like or want to do.
As I see it there are two things happening:
1) We have the christian fundamentalists, who are absolutely certain that gambling doesn’t fit into God’s plan for the human race.
2) State governments run lotteries and don’t want online casinos to take away from their action.
With a two-pronged attack like this, I think the result is inevitable. It’s only a matter of time before all states make online gambling a felony. And they will not be bothered to make an exception for poker.
Gambling losses are tax deductable up to the extent of gambling winnings, for each tax year. You are responsible to pay taxes on NET winnings. Net losses however are not deductable. The previous comment made about individual session winnings being taxable but losing session aren’t, simply isn’t true. I agree with all previous suggestions recommending consulting a tax expert if you are in doubt, and keep accurate records. I’m comfortable going solo on this. And while I’m not tax expert, I am a CPA.
Tim
If we hurt our lottery system, how would we fund our schools?!! We need all of the money we can get so we can support a senseless war, some porked out legislation, etc. We must win this war against the big bad gamblers….screw spending money to improve our country, lets spend $$ to recover…..oh yeah, not as much money.
-t
Ed,
In your article, $10,000 you mentioned seems to be a limit. Do you know if I need to report taxes if my winnings is less than, say, $5,000?
thanks,
Charles,
The IRS requires that you report all gambling income, no matter how small.
The $10,000 number is just the cutoff for having to report offshore assets. There’s no cutoff for reporting income.
I hate neteller for this.
My wins probably totalled 3K and losses 1.4K. I did not bother to report and my refund is due via Santa Barbara Trust tomorrow.
Rod, if I read your your comment aright, you have just publicly admitted to committing a felony: deliberate failure to report income on your federal income tax form. Why on earth would you do something like that? Do you think the IRS can’t find you? If they want you, they can. Do you think that they won’t bother because you are small potatoes, and your admission of guilt won’t come to their attention anyway? Maybe you’re right about that and maybe you aren’t. You’d be surprised about what the IRS decides is worth pursuing. About 25 years ago, a professor of my acquaintance was hounded by the IRS for failing to declare income from student bribes (for good grades). There were no such bribes and there was no such undeclared income, but the poor professor had a world of trouble trying to get out of the IRS’s clutches. My assumption at the time was that a disgruntled student unhappy about his/her grade concocted this story just to make trouble–and perhaps collect some snitch-bounty. You know, I am living on a not very large pension, and I might very well make a tidy little sum on the side dropping a dime on all the poker players who have loudly announced that they have not in the past and will not in the future declare their poker winnings. In fact, I am going to mind my own business and not succumb to the temptation of easy IRS reward money, but that’s just because I am a nice old broad. But not everyone is as nice as I am. Just because you get your refund, you are not out of the woods. The IRS has years to come after you if it wants to. At the very least if you are going to commit a felony, keep your mouth shut about it. Seems like it will take some additional blows before that horse is really dead enough not to need further beating.
First let me say that i am going to pay my taxes but im just confused if aggregate of $10,000 means 100 deposits of $100 over the course of 2006 for example or on december 11 my neteller balance was $10,001 a one time balance? My neteller balance was never even close to $10,000 on any single day but if i added up each deposit and withdrawal and transfer over the course of 2006 it probably would be over $10,000.ty
I highly recommend that anyone who did not properly fill out their taxes in the past submit an amended return NOW. It may be their only chance to avoid an audit, or in some cases a much harsher penalty involving money laundering.