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Old 04-30-2010, 07:30 AM   #1226
TaxGuru
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Re: Canadian Online Poker Tax Thread

I do not believe that a CA would ever advise you to do what you have done. If I'm wrong, at least you could consider suing them to indemnify yourself based on gross professional negligence.
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Old 04-30-2010, 08:26 AM   #1227
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Re: Canadian Online Poker Tax Thread

Calling it foreign income is not really a good idea even from the POV of reducing audit risk since 99% of people who do have that type of income will have some offsetting foreign tax credit for taxes already paid outside of the country.
Not having the offsetting deduction actually will likely increase audit risk IMHO.

Other points to consider:
1. Partially declaring income is always a bad idea - it shows you were aware that you were taxable and chose to evade some taxes which is bad for you and you lose your main defence of non-taxability.

2. Declaring income so you qualify for a mortgage may not necessarily be a bad idea. Situation dependant

3. Calling it foreign employment income will raise further questions: who was your employer? what documentation of income do you have? were you legally allowed to work there? Can we tell the other country that one of their employers evaded withholding taxes there?
You are always better of calling it business income. If it is business income and you get losses one year, you might be able to recover some previosuly paid taxes. Employment income can't generate losses and thus recover previosuly paid taxes.

4. The sites will not give the government anything. Intermediaries like a neteller might but the sites won't. Nevertheless, CRA won't even try very hard to get it. they just try to figure out what you must have made in order to live the way you do and have what you have through a net worth assessement and then turn the tables and force you to disprove their guess (which is always high). To do that you have to show them your records anyways and they get you that way.

So you pretty much did everything wrong, sorry.

Last edited by TorontoCFE; 04-30-2010 at 08:33 AM.
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Old 04-30-2010, 01:18 PM   #1228
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Re: Canadian Online Poker Tax Thread

I really appreciate the response, even tho it's making me feel pretty sick.

Would it be best then to declare as business/ or self employment income now? Or will it not matter since I've already declared as foreign income for 3 years.

If I declare the full amount I took out then at least I'll have some continuity and it looks like there's some method to the madness. Or as you say if an audit happens and they can get neteller transaction information from me then it really makes no difference.

Any recommendation would be greatly appreciated, I'm not sure what the least damaging next step is for me

Thanks again for all the input
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Old 04-30-2010, 01:51 PM   #1229
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Re: Canadian Online Poker Tax Thread

Getting any solid legal tax help April 30th won't happen.
Those guys are working all day for their regulars.

If you have the need to file today I guess doing it like you did the last few years might be all you can do until you get this straightened out.

Mistakes can be fixed. Even if it's for a number of years.
I've done quite a few amended returns with totally agreeable reassessments as a result.
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Old 04-30-2010, 02:27 PM   #1230
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Re: Canadian Online Poker Tax Thread

Since today is your last day,

If the amount is not significant or you believe you are non-taxable, file a return with nothing.

If the amount is material and you think you are a pro and thus taxable,
file it as business income (not self-empolyment income).

I wouldn't bother to amend past returns unless you are talking 100's of k
in income.
Even your elevated audit risk is only up to something like 5%.
If you do get audited, you don't have any really good options but you can jump off that bridge if it comes to that.
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Old 04-30-2010, 03:56 PM   #1231
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Re: Canadian Online Poker Tax Thread

If we believe we owe nothing is it better to file a return with nothing or just not file?
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Old 04-30-2010, 04:30 PM   #1232
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by cassette View Post
If we believe we owe nothing is it better to file a return with nothing or just not file?
Depends.

Normally I use to advise not filing but slowly the benefits of filing are adding up -- if you want to avail yourself of the TFSA you have to file, likewise to get GST rebates $250-350/year, you'll also get at least $100 for the sales tax credit and if you pay rent at least in Ontario you'll get a small percentage of that back. Further, if you apply for a NIQ mortgage they are going to want to see clean NOAs to insure that you don't owe anything to CRA. Also if you made a few grand then you also qualify for some credit for working people with low incomes that adds up to another $600-800. If you had medical expenses then you get some cash there as well.
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Old 04-30-2010, 10:18 PM   #1233
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Re: Canadian Online Poker Tax Thread

Definitely doesn't reach the 6 figure area, but I think I'll go ahead with business income.

Should I have it be consistent with past years and the amount I withdrew into my bank account or will that not matter? Only reason to even think about changing it is because of being very tight on money at present and not being able to really afford it.

Thank you for taking your time in posting and the advice
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Old 05-01-2010, 03:33 AM   #1234
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Re: Canadian Online Poker Tax Thread

For the people that have declared some income, did you go all the way and say gambling related?

Or when having to choose a category did you something vague such as "consulting related to computers". (which i may have done)
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Old 05-05-2010, 04:26 PM   #1235
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
Normally I use to advise not filing but slowly the benefits of filing are adding up -- if you want to avail yourself of the TFSA you have to file
Hmm. I have not been filling and opened up a TFSA. Mistake?
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Old 05-05-2010, 04:43 PM   #1236
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Re: Canadian Online Poker Tax Thread

What does it have to do with the TFSA?
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Old 05-05-2010, 05:38 PM   #1237
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Re: Canadian Online Poker Tax Thread

I can't remember if it was BMO or CIBC told me I wouldn't be allowed to open a TFSA with showing my NOA which didn't make any sense to me since the amount is a set $5k/year but I just assumed they were correct without looking into it.
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Old 05-05-2010, 05:51 PM   #1238
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Re: Canadian Online Poker Tax Thread

Your tax return is how CRA determines your contribution room (for example, if you don't file because of non-residency, then you get no contribution room)

The CRA would determine TFSA contribution room (based on information provided by issuers) for each eligible individual who files an annual T1 individual income tax return.

Individuals who have not filed returns for prior years (because for example, there was no tax payable) would be permitted to establish their entitlement to contribution room by filing a return for those years or by other means acceptable to the CRA.
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Old 05-05-2010, 06:04 PM   #1239
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Re: Canadian Online Poker Tax Thread

*Sigh*. TorontoCFE's response is better. Never mind.

Last edited by SlightlyMad; 05-05-2010 at 06:06 PM. Reason: TorontoCFE knows what he is talking about.
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Old 05-05-2010, 08:54 PM   #1240
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by DominoEffect View Post
For the people that have declared some income, did you go all the way and say gambling related?

Or when having to choose a category did you something vague such as "consulting related to computers". (which i may have done)
I really don't get you man. Why would you claim poker earnings AND lie. Are you trolling this thread or just a little mental? All the possible benefits of claiming your poker earning get thrown out the window when you make up crap like "consulting related to computers" and you're lying on a return which is a criminal offense. So you're risking criminal charges AND paying tax while setting yourself up to have no deductibles for poker expenses or potential future loses. WHY?

At least people who claim nothing can genuinely claim that they don't believe they should be taxed. You've managed to extract the absolute worst out of both possibilities (claiming or not claiming) and combine them together for one big massive F*** yourself.

(1) You're paying taxes.
(2) You can deduct nothing
(3) You're more liable for criminal charges and serious issues with CRA than anybody (even those who file nothing).
(4) You can still get audited and pay back taxes and interest (maybe criminally charged) since you're not claiming everything.
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Old 05-09-2010, 04:28 AM   #1241
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Re: Canadian Online Poker Tax Thread

jesus...f me.. I guess the best play is talk to some good tax attourney that maybe has experience wiith poker/gambling and amend my return at some point this year =[
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Old 05-12-2010, 01:49 AM   #1242
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
I can't remember if it was BMO or CIBC told me I wouldn't be allowed to open a TFSA with showing my NOA which didn't make any sense to me since the amount is a set $5k/year but I just assumed they were correct without looking into it.
I opened mine up through Questrade and have yet to come across any issues.

Quote:
Originally Posted by TorontoCFE View Post
Your tax return is how CRA determines your contribution room (for example, if you don't file because of non-residency, then you get no contribution room)

The CRA would determine TFSA contribution room (based on information provided by issuers) for each eligible individual who files an annual T1 individual income tax return.

Individuals who have not filed returns for prior years (because for example, there was no tax payable) would be permitted to establish their entitlement to contribution room by filing a return for those years or by other means acceptable to the CRA.
So what does this mean exactly in my case as I have opened up a TFSA (5k room used last year) yet I have not and do not plan to file a return for that year.
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Old 05-12-2010, 07:55 AM   #1243
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Re: Canadian Online Poker Tax Thread

CRA will likely request that you file a return (in which case you have to)
or they may ask for proof you resided in Canada during the year. Most likely they will request you file a return.

If they are not satisfied somehow that you were residing in Canada then they can deny your contribution room and you'd be assessed a penalty of 1% a month until you make them happy.
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Old 05-12-2010, 01:47 PM   #1244
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by TorontoCFE View Post
you'd be assessed a penalty of 1% a month until you make them happy.
Didn't this change? Or is this different then over contributing?
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Old 05-12-2010, 09:21 PM   #1245
TorontoCFE
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Re: Canadian Online Poker Tax Thread

overcontributing on purpose makes the whole thing taxable.
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Old 05-14-2010, 12:58 PM   #1246
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Re: Canadian Online Poker Tax Thread

WSOP question.

My understanding is harrah's withholds 30% of any winnnings? (is it over 10k or any winnings at all?) You then have to fill out a bunch of paper work and at some point you can get most if not all of the 30% back?

Can somebody clarify this for me please?

Thanks.
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Old 05-14-2010, 02:10 PM   #1247
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Re: Canadian Online Poker Tax Thread

Yeah pretty much.
I used this site:
http://www.casinotaxrebate.com/ (no affiliation, still waiting my return actually so nothing nice to say yet )
You can read the FAQ there or use their live chat.
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Old 05-14-2010, 02:44 PM   #1248
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Re: Canadian Online Poker Tax Thread

This makes me not wanna play any WSOP events... seems like a huge hassle to get the money back.
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Old 05-14-2010, 02:52 PM   #1249
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Re: Canadian Online Poker Tax Thread

It wasn't really that tough. They sent me a few forms, I signed them and got a certified copy of my passport and then sent it to those guys.

If you get your tax number at the casino, you could skip the passport part.
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Old 05-14-2010, 03:30 PM   #1250
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by the_main View Post
It wasn't really that tough. They sent me a few forms, I signed them and got a certified copy of my passport and then sent it to those guys.

If you get your tax number at the casino, you could skip the passport part.
how long have you been waiting for? And how much do these guy charge?
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