Do You Have to Pay on Your Online Poker Winnings?

For winning poker players (or any winning gambler, actually) there’s always the temptation to take your winnings and run. By that I mean NOT reporting any of these winnings to Uncle Sam, aka The IRS. If you need a primer on why it’s generally a bad idea to not pay taxes, feel free to Google “IRS problems” and if that doesn’t motivate you to pay taxes, nothing will. In short, The IRS doesn’t care where your money comes from, in fact they even require drug dealers to report their income and pay taxes! So don’t think that just because the money comes from the tables and not an employer’s payroll it’s ok to skip paying taxes.

Casinos will require you to report any cash out of more than $10,000 to the IRS. Cash in any live poker tournament at a Harrahs property for more than $600.00 and you have to do the same. That’s why Harrahs and most other large Casino properties require to have a players card (and your Social Security number) to even enter the events. If you play full time it’s a good idea to report not only your winnings but your losses as well. Travel to and from the casino, the food you eat while playing, and hotel room fees are all tax deductible.

If you’re an online player it’s still a good idea to report your wins and loses to the IRS. Yes, we know that online poker is still a legal gray area but there’s no known record of ANY online poker player that has been locked up because they reported their winnings to the tax man. Remember the line above about drug dealers paying taxes? They have bigger fish to fry, my friend.

Assuming that you’ve seen the light and you’re ready to walk the straight and narrow, it’s a good idea to find a good Certified Public Accountant (CPA) to prepare your taxes for you. These people are trained to know the latest tax codes and what you can and can’t expense from a tax perspective. Just as you can expense travel and food for live play, you can do the same as an online player. Your PC, that new monitor, your Internet connection charges, and even your new keyboard are all tax deductible. Since you’re a professional working from home you can also expense the “office space” that you occupy when playing online.

In summary, if you’re a winning player and poker accounts for more than a few thousand dollars a year in income for you, it’s time to file and pay taxes on those winnings. It’s a small expense to pay and last time we checked, they don’t allow broadband Internet and Laptops in prison! So check your local laws where you play and find a good CPA and pay those taxes so that the IRS doesn’t put a bad beat on you.

Poker Room Guide

Poker Networks

Best Network Rooms

Best Independent Rooms