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The Kondler & Associates CPAs Poker Tax Hub

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FAQ

  1. How do I know if I am classified as a professional poker player or an amateur poker player? Are there benefits or drawbacks to each?

    If you dedicate a substantial amount of time and derive a substantial amount of income or loss from playing poker, you may be able to file as a professional gambler. As a professional player, you are able to deduct poker-related expenses from income. However, any income in excess of losses and expenses is assessed self-employment taxes.

  2. I am not a U.S. citizen, but I cashed in a U.S. tournament and had tax withheld from my payout. What do I need to do in order to claim the amount withheld?

    Players in this situation must file in the U.S. in order to claim all or part of the money withheld. In order to file, you must have an Individual Taxpayer Identification Number (ITIN). Players can apply for an ITIN in the U.S., but must submit a copy of their passport that is certified by the issuing agency or consulate associated with the passport.

  3. I cashed in an event and I had a backer, what do I need to do in order to properly handle the situation?

    Any player who cashed in an event and had a backer needs to issue the backer Form 1099-MISC. This form is filed at year-end to the IRS and documents the transfer of income from the player to the backer. Per IRS guidelines, Form 1099-MISC must be postmarked by February 1 in order to give the recipient the appropriate time to incorporate it into their tax return.

  4. I am a U.S. citizen and play online and have money in a foreign bank account, what do I need to do in order to disclose this information?

    U.S. players who play online or have money in foreign countries may be required to disclose these bank accounts to the IRS. There is no fee or fine associated with disclosing a foreign bank account, but individuals who do not disclose these accounts can be fined or sentenced to prison.

  5. I received the frozen funds from my Full Tilt account this year, what is the proper way to show this as I file my taxes?

    Players that receive funds from their Full Tilt account can choose to amend prior year’s tax returns to reflect the income or expenses associated with the funds during that period or account for the total gain or loss associated with the funds in the current year.