If you pull in 6 figures why not be safer with the gov and declare more than an amount near the poverty line? To save 2-3k in taxes? I'd rather declare 40kish and pay ~5k in taxes than raise a ton of suspicions.

$40k would actually be ~$9400 payable in Ontario.

It's better to file a nil (or very low income if you have interest, dividends, etc) return than it is to partly report your income. Your filing position is at least legally coherent (you implicitly claim that your poker winnings are not "income from a source"), even if it may be legally incorrect. Partly reporting your income is both legally incoherent and verifiably wrong.

What's stopping someone from sending a cheque from the online poker site and then cashing it in at moneymart? That choice leaves absolutely no paper trail.

For those who may want to go down this path.

I agree. It is one thing to say I didn't think poker income was income. There is no way to say I thought 20% of my poker income was income and not the other 80%. You'll be a lot worse off in the second scenario.

The other advantage of filing a return even if you have no tax payable is that you get your TFSA space for the year.

Do you people not even bother to read the topic before posting?

Why this doesn't work has been covered at least a half-dozen times -- likely closer to a dozen.

Really? I have yet to see any threads on the topic that I posted about.

Post some up.

You are posting in it.

ALRIGHT. My apologies.

Apparently I need to use the SEARCH button better.

It has been discussed in this long ass thread before, and everyone came to the conclusion that there was a small probability of being discovered. And cashing cheques at MM would only suffice if you are putting it in a home safe or etc.

I'm planning on saving up about 100k in cash and then later on pay taxes.(will be using MM)

I hope nothing bad happens lol

If that is your plan why not just use one of the payment processors that has an ATM card?

I have never checked but I would guess that the fees on those are less than the MM and you get the added benefit of not having to go to MM.

I have always been paranoid of Canadian banks, I personally think they snitch on everyone to the government. They've been asking me strange questions since I got my first bank account in 2002. And recently they harassed me about some kind of apparent illegal mishap that happened while I was in university in British Columbia. At one time some TD teller asked me whether I had another bank account other than TD, I said yes, she said "you're lying and now I'm going to lower your credit rating". I found that utterly stupid I just left.

Therefore I would prefer not to deal with them while I am making my first 100k.

Anyone have familiarity for the threshold at which a non-resident in Canada (American) is required to file a Canadian tax return? I.e., move to Canada to play poker, yet meet the definition of "non-resident" for this tax year.

Amidst all the legalese on the CRA website it says for a non-resident, "you pay tax on income you receive from sources in Canada..." Part I tax, Part XIII, blah, blah, blah. Not sure if global online poker would be a Canadian "source," per se.

Obviously trying to keep things as simple as possible, if allowable.

Great question; there is no obvious answer. One thing you can say is that if you're adopting the position that it is not "income from a source," then it cannot be Canadian-sourced income. On the other hand, if it is "income from a source," then it needs to have a geographical source. This is the very difficult bit.

I'm inclined (though I see a rich set of difficulties for this view) to say that if you're playing from Canada, it's as if the chair you're occupying is in Canada, and the table is just very large (so that others at the table can be in other countries). This would make your earnings sourced in Canada.

The other significant possibility is that it is the jurisdiction which hosts the service, which is difficult for a user to know, and can vary quite a bit. It can also be the case that it is hosted in Canada, as you may know.

All in all, very complicated, and I don't think there is a simple (and correct) answer possible.

Thanks for the reply, it does seem all grey area-ish. I assume Kahnawake is "Canada" here vs. some sovereign nation?

Henry I've gone the route of not filling yet I did deposit into a TFSA the very first year it became available. Since then I have not used it at all. I guess I am wondering how this is tracked and how you know how much TFSA space you have available. Is this all done when you file which is why I do not have access to a TFSA? If I recall even if you havent used your TFSA space you still accumulate it year to year?

I'm not certain if what I just wrote was coherent or not but im just hoping for a further understanding of what not filling is doing to my TFSA.

EDIT: I could just google.... bleh.
"Filing a return is the easiest way to establish your contribution room for a Tax-Free Savings Account (TFSA), even though the contribution room is not affected by taxable income. CRA says that "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.""

I still wonder what will happen with my TFSA from 2009... Hmmm.

You can always go back and file for years you didn't file at a later date and still get your TFSA room.

Beyond that I have no idea how the TFSA account stuff is tracked although I do remember that it is was briefly discussed in this topic.

I met another person that makes between 200-300k a year in Canada and doesn't pay taxes to the government. He is currently a full time student however.

I'd say I know at least 3 people that play high stakes poker that make between 200-300k a year in Canada and doesn't pay taxes.

Yes. We all know plenty of people who don't. The legal question of are you required to pay income tax is different than the what happens if you don't pay. Again this has been covered multiple times. Legally you are required to pay income tax but if you don't it is unlikely anything will happen to you. A good way of thinking about it is that it is the same as illegal torrents -- you are violating IP rights and can get in trouble but 99.99% of people never do.

hey how would i claim the money i make from being an affiliate?(sorry if this has been covered)

It is business income.

For anyone who does pay taxes to the Canadian government. What are we allowed to write off as expenses? And are we allowed to use our "losses" to offset our gains?

So I should be relatively safe not filing at all? I quit my job from stress about 2 years ago, and have been living off poker winnings (~40K/year) the last 2 years. I don't really consider myself a professional, but I still don't want to go to jail or anything.

lol just read everything in the thread

Wow, telling someone to read all 110 pages of a thread was helpful.

(1) I was going to direct Hince to read the eBook. After going to the taxwiki.ca site today, I noticed the eBook was taken down; couldn't find it through a quick search on the Wiki, and the edits had broken links.

TaxGuru, is this just a technical glitch or did someone take it down for a reason?

(2) I've had numerous discussions with my accountant who implied that you really can't file as a US poker professional and as a Canadian hobby player; that's just wrong. I've gone through great pains to show that I'm still just a hobby player who got lucky once or twice. However, this year, I'm selling shares of myself, and US backers may want me to assign them their tax liabilites and pay them out in pre-tax dollars rather than in post-tax dollars. From what I understand, this involves filing a IRS Schedule C for business income for the staking arrangement. It adds to the evidence that I am no longer a fortunate and good hobby player versus a poker professional. I wish there was a way at the WSOP to avoid this, but there isn't ... Caesar's won't acknowledge partnerships for payouts.

Should I bother taking non-Canadian backers on? Most of them have been accepting of the tax situation ... and don't require the painful IRS paperwork. (This all anticipates that I will have a significant tax problem, which would be a nice problem to have, of course. ;-) )

So you want us to tell you how likely it is you will get away with breaking the law? I'm not going to answer that.

It doesn't really matter whether you consider yourself a pro. I matters whether your situation matches that of a person who has to pay taxes on poker earnings.

If you are telling us that you quit you job and played poker with the intent of living off your winnings, and that you have actually done so, then I think there is a pretty strong case that you fall into the class of people who are required to pay tax on your net poker winnings. Your facts may well demonstrate operating a business, an organized approach and a reasonable expectation of profit.

IANAL, though. Get yourself some real legal advice.

As for the general issue of whether the CRA goes after poker-playing tax cheaters, several people have posted here that the CRA do not have much of a history of doing so. However, like they say in the markets, past performance is not necessarily a reliable indication of future results. For example, the UIGEA was passed in 2006, but the DoJ only charged sites for the first time a month ago. Up until April 14, past performance indicated the DoJ was only going after processors. There are changes going on at the CRA WRT to compliance and enforcement. Will this affect Canadian poker players? I'm not in a position to say.