Hello, I am a USA tournament player in Vegas and will be playing numerous events this upcoming month. I was trying to understand more how taxes work for USA players with tournaments mainly in regards to staking!

To start, I hear that any net win over $5000 triggers getting taxed 33%? Is any of this able to be deducted if filing as professional? And if so how is this calculated vs your other winnings that are less than $5k.

The main reason I am trying to understand this is though I have a positive ROI even with taxes (which obviously drops dramatically) how would I calculate this with people buying percents of my action?

Legally, you are always supposed to report your winnings, regardless of its over $5k or not.

If you profit over $5k the casino will have you fill out a tax form, and now the government KNOWS that you won that amount. So now if you dont report it, then the government has an easy way to find out and audit you.

Your winnings aren't taxed at 33%. They are added to your reported income and then that gets taxed for whatever % your tax bracket is.


The simply way to handle paying out backers is to estimate how much of your winnings will be taxed and take it off the top, then pay your backer whatever % is owed.

The proper way is to have them fill out their own tax transfer form, where you only declare your % of the winnings as your income and then your backers declare their % of the winnings and their income and its all accounted for.