Anyone have any info on taxes for Global Poker?

One thing I was thinking was that we are buying gold coins, but cashing out Sweepstakes money. For example, what if I bought $1,000 of gold coins, getting free sweeps cash. Now I cash out $2,000. Aren't sweeptstakes winnings taxed at a certain amount, so we would be paying taxes on 2k, not the 1k profit? Or maybe I'm missing something.

Also, I was told that Global doesn't report to IRS, but Paypal reports to IRS for businesses or individuals who receive over 20k for sale of goods of services and over 200 transactions. I'm guessing they are saying that Paypal reports Global to the IRS, not someone who receives 20k or more.

So then when global reports to the IRS, are they also giving individual names of players who cashed out?

Thanks

https://www.irs.gov/forms-pubs/about-form-1099misc

They are supposed to send you a 1099 for prizes more than $600 in any given calendar year.

As a business owner that has used PayPal in the past, in most cases it's PayPal that issues the 1099(k). But it's only a report of income, not necessarily the source thereof...

Ok, so I can use that as a gross, not net income then, correct?

Thanks!

A 1099k reports gross earnings, yes.

I think the taxes on this are a very gray area. That being said, you probably won't get in trouble with the IRS if you take a reasonable approach, although they may come back and want you to pay more tax.

(1) File as a professional gambler. You can only do this if you are actually a professional gambler. You would declare net win on schedule C and deduct any expenses. You cannot declare a net loss from gambling. You are required to keep really good records and act professionally.

(2) File as a recreational gambler. You put the total of all your winning sessions under "other income." You deduct the total of all your losing sessions on Schedule A (not more than wins). This is not subject to the 2% limitation but if you take the standard deduction you can't do it. You are required to keep a written log of each gambling session.

(3) File as a sweepstakes winner. I think this is the worst choice, since you would have to declare buy-ins as expenses and itemize, and it would be subject to the 2% limit.

Everybody should read "Tax Help for Gamblers" by Scott and Chien. I don't know if it has been revised to cover this new sweepstakes model though. Some states have really bad tax treatment of gambling and don't allow losses to be deducted at all for state income tax purposes.

QL

Interesting to me that the Global Poker rep doesn't have any advice on this topic and I don't see anything on their website about taxes.

They also don't have advice on when to three-bet pocket tens.

Why would they? I wouldn’t want to give out tax advice as a non CPA/accounting firm


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Because they are running a "sweepstakes" and according to sweepstakes law:

If you win a prize valued over $600, the sweepstakes or contest sponsor must report the value to you and the Internal Revenue Service on a Form 1099-MISC.

If the sweepstakes prize is worth more than $5,000, the sponsor must withhold 25 percent of the prize value for federal taxes and may have to withhold state taxes as well.

Yet there is no mention of how they are handling these sweepstakes prize distributions.

Fair enough. Wasn’t aware of that but glad they aren’t Doing it to be honest. Personally, I’m doing quiet lions #2 method when preparing my taxes. Think it makes the most logical sense.


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They aren't a US company. I don't believe they are required to send US tax forms.

QL

What happens if you don't report it at all? I haven't gotten a thing from PayPal. I have plenty of $1000+ wins.

Nothing happens until if and when you are audited.

Then I don't know that anyone here would be able to tell you exactly what will happen. It can range paying what you owe, fines and on the extreme side jail time.

My advice to you is to give to Ceaser that which is Ceaser's.

And if you aren't comfortable deciding what that should be as you look through your tax documents and paperwork, get a professional's advice.

You don't ever want to be in a situation where you are explaining to the IRS, "So the thing is I was in this 2+2 thread and they said..."

What splayaa said. I’d rather pay my taxes than risk getting audited and getting fined.


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May want to check your PayPal account. It has a section for tax documents.

Everybody should read "Tax Help for Gamblers" by Scott and Chien. I don't know if it has been revised to cover this new sweepstakes model though. Some states have really bad tax treatment of gambling and don't allow losses to be deducted at all for state income tax purposes.


Thanks for this tip

Any idea why it says there are no documents available for me when I go to the tax documents section?

Yeah, same here. I didn't play at all from Jan-Aug 17, if that's relevant.

Over the years, my friend has just made his best guess as to his taxable income based on pokertableratings, sharkscope, and a brief time when he had PT. He's never been audited, and he hopes that his earnest effort to be accurate counts for something. He has no intention to evade taxes, he's just extremely unprofessional and sloppy!

Well, he also held a real job for half the year. Oh man. Maybe it's time to go in to see a professional.

+1, this seems very wise to me considering your particular situation. Me, I just fill in the blanks and count it as misc. income, but my poker income is less than 5% of my total gross earnings.

If more than 25% of my gross income was coming from poker, or any kind of winnings/drawings/lottery/gambling, to the professionals I would go.

#1 is very wrong. For years prior to 1/1/2018 you CAN report a loss from gambling on your Schedule C. You can also carry those losses back 2 years and forward 20 years and offset your future taxes. You cannot report wagering losses of more than your winnings, but you can have a loss caused by other ordinary business expenses.

Also, it changed with the new tax reform for years 2018 to 2026. Now ALL expenses are limited to the winnings.

VERY IMPORTANT! Starting 2018, professional Poker players and other gamrblers can also take a new 20% deduction aka Sec 199A.

So how do taxes work now that it's not paypal, and just shows up as a random lump of $$$ in your bank account like a direct deposit???

Why does that matter? Winning money is winning money no matter the form. Report as gambling winnings/talk to a CPA. Track your results in Excel and be able to back that up with account and bank statements. What more is needed?

So if I win $800 I have to declare gambling winnings?

Yes.

QL