Forgot to pay taxes on promotion prizes, what am I looking at? - Poker Legislation

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Forgot to pay taxes on promotion prizes, what am I looking at?

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02-02-2017 , 05:18 PM

Chipnami

enthusiast

Join Date: Mar 2016 Posts: 64

I played a lot of small stakes live poker earlier in 2016. I have probably received around $4k in promotional money from drawings and poker points etc for hours. I lost around $3,500 while playing there. I literally left with barely any net gains. I completely forgot to include this on my taxes, I did fill out a w2 I believe two times when I was at the casino for a couple drawings worth over $1k. I can't re-file my taxes, they are already filed and accepted. Is this something the IRS comes after people for? I have a spreadsheet showing I didn't net much of anything.

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02-02-2017 , 05:32 PM

Playbig2000

Carpal \'Tunnel

Join Date: Mar 2008 Posts: 11,307

Did you rec've a 1099misc form?

Basically nothing is going to happen. Over the summer, or early next fall, you're going to receive a letter from the IRS showing the amount you "forgot" to include, the estimated tax, and a due date to avoid additional penalties.

The penalty that will be on the letter, not including if it's not paid by the due date, should be minimal, probably between 100 and 200 dollars. This of course is assuming they filed these winnings, which they probably didn't if you never received a 1099misc.

And don't ask me how I know all of this

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02-02-2017 , 05:33 PM

Avaritia

Confirmed 2500 hour haver

Join Date: Feb 2013 Posts: 12,248

Prison time imo

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02-02-2017 , 05:39 PM

psujohn

veteran

Join Date: Dec 2007 Posts: 2,173

IANA tax attorney but you can file an amended return. It'll likely be better for you in the end to do that now than the get a letter in 9 months that says "yeah you forgot this money" because right now you can likely just pay the tax on that promo income without interest/penalty.

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02-02-2017 , 05:39 PM

Playbig2000

Carpal \'Tunnel

Join Date: Mar 2008 Posts: 11,307

Quote:

Originally Posted by Chipnami

I have probably received around $4k in promotional money from drawings and poker points etc for hours.

hold on do they tax you on your bravo log-in hours?

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02-02-2017 , 07:17 PM

Suit

Pooh-Bah

Join Date: Jul 2012 Posts: 4,744

Quote:

Originally Posted by Chipnami

It all depends on what winnings you signed tax paperwork for. If you had to sign W-9's for a bunch of different wins, then the casino should send you a 1099 if the total of all of those wins is over $600. The wins where you signed a W2-G will not be included on there I don't believe, but you should have been given a copy of those at the time you signed them anyway. I also believe the only way you can claim losses is if you itemize deductions and you'll need records to show your wins and losses.

This is how I understand it, but I'm no expert nor am I 100% sure. Take it for what it's worth. I'm sure there are more experienced people here with taxes on gambling.

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02-02-2017 , 08:13 PM

Chipnami

enthusiast

Join Date: Mar 2016 Posts: 64

Quote:

Originally Posted by Suit

I filled out the form when I got two winnings over $1k, but I received no forms (yet) from the casino. I also lost back the money over time so I heard it all washes itself anyways because I can write off the losses. I guess I will just wait and see what happens, if I don't get a form I wont worry about it.

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02-02-2017 , 09:25 PM

PokerXanadu

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Join Date: Oct 2006 Posts: 10,583

Quote:

Originally Posted by Chipnami

It doesn't work that way. Read the US Taxes sticky in this forum for details.

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02-02-2017 , 11:01 PM

Chipnami

enthusiast

Join Date: Mar 2016 Posts: 64

Quote:

Originally Posted by PokerXanadu

It doesn't work that way. Read the US Taxes sticky in this forum for details.

Ok, are you referring to needing to itemize each session? I have a spreadsheet that kept track of all sessions and which days I had income from the drawings. I also remember reading that if it is under $6k it falls under the standard deduction or something along those lines? I am no tax expert, not even close, I don't mind paying my fair share, just confused on what to do, also since I already filed and haven't received any forms, I am not sure if I should do anything or wait until I receive a form from the IRS.

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02-03-2017 , 01:41 PM

#10

Suit

Pooh-Bah

Join Date: Jul 2012 Posts: 4,744

Quote:

Originally Posted by Chipnami

Did you itemize your deductions when you filed? If no, then you cannot claim your losses.

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02-03-2017 , 04:00 PM

#11

PokerXanadu

Carpal \'Tunnel

Join Date: Oct 2006 Posts: 10,583

Quote:

Originally Posted by Suit

Did you itemize your deductions when you filed? If no, then you cannot claim your losses.

He can change that if he files an amended return.

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02-04-2017 , 03:54 PM

#12

Chipnami

enthusiast

Join Date: Mar 2016 Posts: 64

Quote:

Originally Posted by Suit

Did you itemize your deductions when you filed? If no, then you cannot claim your losses.

I am self employed, my deductions were all through the business side of the Turbo Tax software. I just got the tax form from the casino today. Federal and state have both already been accepted and processed. If I wait to just receive the letter will I be able to offset it with losses at that point? Or do I need to amend now as my only chance to offset with losses?

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02-05-2017 , 05:18 AM

#13

Lego05

Carpal \'Tunnel

Join Date: Mar 2006 Posts: 24,890

Quote:

Originally Posted by Chipnami

You're operating a small business and filing without an accountant?

It looks like you are now are asking if you should file an amended return to report your taxes correctly or wait and see if they catch you having not reported everything.

I mean, from your original post, it is a pretty negligible amount of money.

But the W2s you filled out will definitely show up. So that will be a discrepency.

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02-05-2017 , 01:02 PM

#14

Russ Fox

tax practitioner

Join Date: Jun 2004 Posts: 884

File an amended return. If you file it and pay the additional tax before April 18th there are no penalties and no interest. If you pay after that, there's interest (the current IRS interest rate is 4% APR) and possible penalties (depends on the change in tax and the original amount of tax on your return).

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