Quote:
Originally Posted by howarjo1943@gmail.
I guess I'm just wondering how the government would even know I made money or not? How did they even know I'm a poker player?
They will know because as a responsible citizen of the USA you will be reporting all your income like a good doobie!
How will they really know? Cash players can fly under the radar more than tournament players since you get 1099Gs from some tournament winnings. You also can get a 1099 for winning promotions like High Hands as well.
Some casinos can offer you an annual statement of your wins/losses to justify some of your numbers used on your tax return. If you stay out of the pits and away from the slots this is harder to produce since your player's card really doesn't know your BI/cash out numbers for poker, but they can track your tournament entries.
As an independent 'contractor' you pay taxes for a couple of reasons .. One, because you feel it's the right thing to do or two, you don't want to get caught shorting the government otherwise. You also may want to consider that you will continue to pay into the Social Security system and thus be eligible for benefits later in life as well.
How well ... and how accurate ... you keep your records can both make sure that you only pay what you should and provide good proof should you be asked to do so later.
When you consider yourself a professional the income moves to a different part of the tax return and you can now also deduct the expenses you encounter along the way. There are some other threads you may want to search for on this site that deal directly with the tax side of poker.
Cash is still king in our world, but if you have a lot of 'trackable' assets (cash, car, boat, house) and your income doesn't justify that you can afford them then you may be subject to a 2nd look. I don't think anyone really knows how we get picked for an audit but you want to always be ready if one were to happen.
Long answer short ... You tell them you are now a Pro Poker Player. How much you tell them is totally up to you. GL