Sorry to start a new thread but I am going to be a first time tax payer.

How does it work?

Eg: deposit 1k to Bovada with bitcoins. Withdraw 10k again with bitcoins. How would taxes be filed in this case?

Is it even allowed to file taxes in this case given online poker is not legal ?

I know I am clueless, would appreciate any advice...

Yes, it is not only allowed but required to file taxes in this situation. Fortunately you don't have to worry too much about the Bitcoin side of things.

In more detail:
1. You bought $1k worth of BTC, and when you deposited it into Bodog, it was worth $1040. You would accrue $40 worth of taxable short-term capital gains.
2. You made $9000 playing poker on Bodog. You've now made $9k (or possibly more) in taxable gambling income, about which see the legislation forum or various publications on gambling income for more details if you need them. This part has nothing to do with BTC and happens in one of the ways gamblers have been paying taxes for decades.
3. You cash that $10040 out of Bodog and into BTC, and when you converted it into USD again you ended up with $10500. You now have another $460 of taxable short-term capital gains. (Or loss if it goes the other direction.)

I am not a tax attorney and this is not legal advice.

https://forumserver.twoplustwo.com/5...-poker-740589/

Thanks I read the thread.

For someone who only plays online, should I still be doing my taxes on the "session by session" way? It just feels so awkward

There is no official IRS guidance as to how it is to be done, but the "session by session" method is generally thought to be the correct way. The method you use would only be an issue in the case that the IRS examines your return. If the IRS disagrees with the method you use, you may owe interest and penalties on any shortfall in your income taxes paid if you underpaid under the method they require.

Is this information still accurate in 2018? If not, can someone direct me to literature that is more up to date?

I believe it is all still the same. Be sure to read the US Taxes stick - there is important relevant information there. Pay particular attention to FinCen requirements for reporting a foreign bank account - many bitcoin wallets fit that definition.