Poker & Taxes

Whether or not you play poker for a living or as a hobbyist, if you do it while living inside the US of A (and wager real money while doing so), the government is going to want their piece of your action.

If you play for recreation, your tax filing is going to be pretty straightforward. You’ll simply add all of your gambling winnings/losses up at the end of your tax return.  Whether or not you’re planning to have an accountant take care of your finances or you opt to fill it out online, be relieve to know that this is very difficult to mess this up.  Note: Filing as a recreational gambler, you will not get to write anything off as a tax deduction (other than writing off a portion of your losses if you are a loser– no nice way to put that). And yes… you will have to pay taxes on any/all winnings… just like a waiter has to pay taxes on all of his tips <wink>. But seriously…

If you are a professional poker player (definition of a professional poker player: your sole source of income comes from playing poker) then you are in a very different boat altogether. You are “self-employed”. Woo hoo… feels good doesn’t it? Materials, travel expenses, business lunches, computers, gas… these are all part of your business.  Your business is you- the poker player.  There are a plethora of things that can be deducted when you make poker your own “business”.  I highly recommend you do your research on this if you are a professional. The more you know, the more you’ll be able to lessen the sting (legitimately) come tax season. I have read three books thus far that I found useful.

1. How to turn your poker playing into a business

Although not the best for tax advice in general, a must read if you are going to be playing poker for a living.  This book is very useful if you play a lot in brick and mortar casinos (live poker).

2. The gamblers guide to taxes

This book deals with more of your recreational pit game gambler.

3. How to pay zero taxes (2008 Edition)

This book gives excellent tax advice and is the most useful overall.

Poker tracker is a good tool to help you track your daily wins and losses.  In the event of an audit your auditer will likely want to see that you have kept good records as a poker player.  A daily log showing wins and losses is a must for record keeping. I recommend you keep a detailed daily log in a spreadsheet such as Excel– but whatever works best for you.