In the past the amount I made with poker was so miniscule that I never bothered paying taxes. However, that will be different this year so I will be reporting my winnings.

I have been keeping track of my sessions but it occurred to me recently as to whether or not I should begin to keep track of my tips for tax purposes. I also have not been keeping track of the times I buy food or water. I currently use my blackberry for my record keeping while I'm at the casino and update my computer when I get home.

It seems a little tedious to track everything but it wouldn't take that much effort to track tips on my phone. I could keep a notepad but I just don't see that working for me.

How much should I be tracking for taxes? The casino I play at also gives a $10,000 freeroll for the regulars and monthly gives away miscellanious crap that is at times cool but mostly worthless ($20-$100).

If you mean tips off your stack then those would presumably be calculated in your win/loss numbers. (I'm a geek so I still try to track that to figure my gross as well as net winrate.)

I'd suggest tracking cash tips to floors, valets, meal servers, etc. as well as travel costs (mileage, hotel, etc.) It's probably deductible as a legitimate business expense.

IANAL nor an accountant, etc.

This would be deductible for gamblers filing as a professional gambler. As far as I know, they are not for most gamblers who list the total of winning sessions as "other income" and the total of losing sessions as a miscellaneous itemized deduction.

The Legislation forum tends to have better tax advice, especially answers from accountants like Russ Fox.

As to OP, I'd say $1/hr or whatever for waitress tips is not going to turn you into a huge audit risk. Just include it in your session win or loss. (If you did ever have a serious audit, you would show your blackberry records, and it should be fine.) If you take $10 from your stack to pay for a meal, you might be better off buying that with cash.

-Tom

Technically, if you're not filing as a pro, the IRS claims you cannot deduct tips. If you're filing as a professional gambler, then you are allowed to. And you are supposed to report as income the value of the comps you receive.

I'm not saying what I think you should do. Just parroting the regulations as I understand them.

I prefer to get in the habit of doing it like a professional in case I decide to ever make that move. It's easier to develop good habits now than to try and develop those habits later.

Thanks for your input!

How do you guys justify giving away $3-400 a month for tips. That's about 4K a year and a whopping 100 Grand that could be extra for retirement when it's all said and done.

Never knew that.

Tip recording alternative:

Swing thru the Sportsbook and pick up a couple hundo of losing tickets off the bars (per day)

Turn these "losses" into the IRS to offset any poker income you might accidentally incur. -My dad taught me this, it worked in at least one IRS audit!

BTW, be discrete about picking up the tickets.

Anybody else got any other creative ideas?

how about just telling the truth

So, you ever play poker?

Except the IRS does NOT see it that way. At all. If you're filing as a pro, you get to offset wins and losses and pay tax only on the profit. And you can write off expenses, like poker books, mileage, tips, and whatever else. But you have to pay self-employment taxes (both sides of SS and medicare).

If you are not filing as a pro, you don't get to do any of these things. You must declare ALL of your winning sessions as income. You may then deduct your losing sessions on schedule A (up to the amount of the wins, but no more). And you may not write off expenses. But you don't have to pay self-employment tax.

So sometimes it's better to file as a pro, sometimes it's better to not. But you don't get to pick and choose based on what's good for you. If you get most of your income from poker, file as a pro. If you have a job that pays a lot more than your poker income, you're an amateur.

And state rules very all over the board. I believe some states claim it's illegal to be a professional gambler. Don't list "poker player" as your profession in Ohio, for instance. And in some states gambling loses are never deductible for any reason. If you follow the latter of the law in those states, and you had $1M of wins in a year and $1.1M in loses for the year, you'd owe the state income tax on $1M.

So everybody who plays poker is (or should be) a tax evasion felon? Interesting comparison.

A felon? Lighten up Francis.

Hello God? we have found some pokerplayers, of all people, that are without sin.

I guess my point is the fact that you have NO documention of tips, losses, etc... to offset some DOCUMENTED winnings (i.e. tournies)... and there is a chance that the IRS is not going to take your undocumented, unverifiable expense claim just because your a "good guy" and that you promise that your dealers have been tipped more than all the sleeping cows in Nebraska.

If you get audited, you will problably just get a tax bill in the mail. Even if you have verifiable expense documention, it will be a major league b!tch to get them off your posterior....G-Men don't call you back! I cant even imagine getting by with NO expense documentation other than something logged in a crackberry. Keep in mind, we are talking about an ACTUAL audit/bill, not the simple tax form preparation. Everything is fun & games to this point.

In god we trust....all others bring documention.

???????????????????????

'Scuse me, but, weren't you advocating going through the sports book and picking up a couple $hundred of used tickets every day? You don't think willful tax fraud to the tune of $thousands of untrue gambling loses is fraudulent? And felonious?

For your bathroom reading pleasure, let me present guidelines from the US Dept of Justice regarding when they will consider plea agreements and under what conditions taken from http://www.justice.gov/tax/readingro...tm/16ctax.htm:
You can mess around with this on your own all you want. But getting on 2+2 and advocating it as a strategy while trying to downplay the significance is not doing a service to your fellow 2+2 readers.

I understand all of that. I've spent time in the tax forum here and I bought a gambling book on taxes. What I'm saying is as a non-pro now keeping track of tips is something I may or may not do but as a pro I would do it so I might as well get in the habit now.

There is a tax court case about a guy showing his losing horse racing tickets. The court found a lack credibility about them when they were unsupported by other evidence and the fact the some of the tickets had footprints on them! In today's environment, if your bank records, cash withdrawals, etc, don't match up with the dates and amounts on the tickets... well, they don't play 4/8 in prison.

Interesting discussion.

Some other questions: Does the status change depending on whether you're a non-resident alien who was forced to pay 30% withholding?

For example, my payout sheet shows the tip that I gave to the WSOP dealer pool when I cashed. Should I be able to write that off (whether an amateur or a professional)? After all, this is something that should have come off pre-tax ... the dealers/tournament staff are paying tax on it (iirc), so why should it be double taxed?

The second issue is what about a tip that does not have documentation. I tipped the dealer pool at the Venetian some cash when I min-cashed in a Deep Stack tournament ... all I have is my word for it since I was given casino chips and no documentation because it wasn't "notify the IRS" worthy.