Do I Have To Pay Taxes With Betting?

[BaldEagle]

This thread has some good info in it..

http://answers.yahoo.com/question/index?qid=20080420134344AALy6hi

Short answer is, if you are making 5-10K a year don't sweat it.

If you are making more than than that you might want to start keeping an accurate log and report it.

Once I cross the 10K a year in "extra" income between poker and sports betting I will definately start reporting it. If for no other reason than not to have some IRS guy go "WTF! You can't afford a Ferrari" when I file my piddly 40K a year net income statement to them.

Just keep it within reason and you will be fine. But OFFICIALLY you have to report 100% of all gambling income offset by documented gambling losses.

 

[Coaster]

A side bar on this.
Talked to a few friends about this subject last night.

An accountant friend of mine, talked a bud into adding $100 gambling winnings to his income. They accepted it and he was taxed.

The next year he put in a $200 gambling loss and it was rejected.
The (Canadian) Tax Dept. said they tax winnings but do not allow losses.

If you need a moral reason to not claim winnings .....this would be it.

 

[joe361]

A side bar on this.
Talked to a few friends about this subject last night.

An accountant friend of mine, talked a bud into adding $100 gambling winnings to his income. They accepted it and he was taxed.

The next year he put in a $200 gambling loss and it was rejected.
The (Canadian) Tax Dept. said they tax winnings but do not allow losses.

If you need a moral reason to not claim winnings .....this would be it.

From the IRS web site, "Deducting losses: If you itemize deductions, you can deduct your gambling losses for the year on line 28, Schedule A (Form 1040). You cannot deduct gambling losses that are more than your winnings."

 

[trkwrigh]

I suppose I was misinformed but I thought you would only pay taxes on gambling that was done legally inside of the U.S. such as in Vegas. If you reported gambling such as online wouldn't you be admitting that your participating in illegal events. I have also wondered if Western Union ever submits anything to the government in regards to payment received or sent?

 

[RDC-3]

I would advise against using West union. the last time i tried to use it they wanted me to fill out some long forms with all sorts of info about me so I wont dont it.

 

[BaldEagle]

I can't find it anywhere now, but I read somewhere that the IRS cannot report you to the rest of the government for illegal activities you report. You could write "Illegal Drug Seller" as your occupation and it wouldn't matter.

Not that I would try it.. but that is what I read.

And you have to pay taxes on any income earned whether it is in the US or abroad. If I go to Canada for 2 months to help herd the reindeer I still have to pay US taxes on that income since I "live" in the US.

On the plus side if you live in a state with no state income tax (ala Nevada) and earn money in another state (My company is based out of California but I work from home in Nevada) then I pay taxes in Nevada and hence no state tax.

I suppose I was misinformed but I thought you would only pay taxes on gambling that was done legally inside of the U.S. such as in Vegas. If you reported gambling such as online wouldn't you be admitting that your participating in illegal events. I have also wondered if Western Union ever submits anything to the government in regards to payment received or sent?

 

[RDC-3]

I can't find it anywhere now, but I read somewhere that the IRS cannot report you to the rest of the government for illegal activities you report. You could write "Illegal Drug Seller" as your occupation and it wouldn't matter.

Not that I would try it.. but that is what I read.

And you have to pay taxes on any income earned whether it is in the US or abroad. If I go to Canada for 2 months to help herd the reindeer I still have to pay US taxes on that income since I "live" in the US.

On the plus side if you live in a state with no state income tax (ala Nevada) and earn money in another state (My company is based out of California but I work from home in Nevada) then I pay taxes in Nevada and hence no state tax.



let me make sure I understand this correctly becase this is very interesting on what you said. If I have residency in the state of Nevada and make money on sports offshore I would not have to report that income because there is no state income tax? appreeciate your help.

 

[rolltide]

let me make sure I understand this correctly becase this is very interesting on what you said. If I have residency in the state of Nevada and make money on sports offshore I would not have to report that income because there is no state income tax? appreeciate your help.

well you still have to report and pay federal income tax but yes, of course, if you live in state with no income tax you would not have to pay state tax on gambling earnings

 

[Kurtopia]

ok, thanks for the help guys, im getting a lot of different answers here. i would like to hear from bigbookie and seriousaddiction, they are solid gamblers in here, i want to hear from them. so, bigbookie and serious, please write in my thread about the subject

 

[homedawg]

ok, thanks for the help guys, im getting a lot of different answers here. i would like to hear from bigbookie and seriousaddiction, they are solid gamblers in here, i want to hear from them. so, bigbookie and serious, please write in my thread about the subject

big bookie is exactly that a bookie so he isn't reporting anything. thats like him calling the cops on himself. as for seriousaddiction i think i can answer for him by saying hollow out a wall, or bury it in your backyard:toast:

 

[BaldEagle]

big bookie is exactly that a bookie so he isn't reporting anything. thats like him calling the cops on himself. as for seriousaddiction i think i can answer for him by saying hollow out a wall, or bury it in your backyard:toast:

Serious Addiction already came back and said he bets with a local book so no paper trail.

BigBookie I won't speak for, but I am 99% positive that if he DID report his income (which he well might) it would have no effect on his business as far as cops go. I wish I could find the article about reporting illegal activities to the IRS. There was a huge thread on twoplustwo in regards to poker and I read it in there.

The last thing you want to do is have large deposits into a bank account with no documented income to back it up. That is tax evasion and will land you in jail VERY quickly.

That is why the old mob guys had money laundering fronts to make their cash "legit". And they still got busted for tax evasion, they couldn't prove any of the other crap but they took down Capone for Tax Evasion!

 

[Kurtopia]

ok so should i report all my winnings then? i dont really feel like going to jail. i dont make much money from betting, but i DO make money. if i have a job is that a good cover up? is there any way of the government finding out about people making money gambling through a sportsbook on the internet?? i havnt made shit this year, but as i get better at betting, i would like to know this information

:cripwalk:

 

[RDC-3]

ive been reading this forum for years and i have never heard of anyone going to jail for not claiming their winnings.I think you would have to be dealing in tens of thousands for any red flags to arise.

 

[BaldEagle]

100% agree. My personal threshhold is when I make over 10K a year in net profit at non-documented sources. I will start reporting it.

Of course so far.. I have yet to have a positive year. I am hoping that changes this year!

ive been reading this forum for years and i have never heard of anyone going to jail for not claiming their winnings.I think you would have to be dealing in tens of thousands for any red flags to arise.