If you are confused about your deductible rights as a poker player when tax time comes around, you're not alone. Kondler and Associates currently have a booth set up in the hallway of the Rio Convention Center for the 2013 World Series of Poker, so we stopped by to discuss their services and sought out some valuable advice for you as a poker player.
Watch the following video with Raymond P. Kondler, CPA, CCPS to find out what major tax issues affect poker players, and what tax deductions are available for professionals.
What steps do you recommend poker players take to properly qualify as a professional?
Players should keep detailed logbooks of poker and gambling winnings and losses for not only tournament play but also for cash games and online play. At a minimum, the logbook should contain each date and location of play, and the profit/loss from each session. For table games, the IRS would also like to see the table number, and actual documentation that you were at the location, i.e. parking receipts, hotel reservations, etc. Another type of documentation accepted by the IRS is the player's win/loss report that can be issued by the casino, which is tracked via loyalty programs.
How are international players taxed in the US here at the WSOP?
Non-US citizens winning in the U.S. are governed by the tax treaties between their country and the U.S. Most of the treaties agreed to were, in essence, adopted to avoid double taxation by the taxpayer. If a non-US player receives a W-2G for winnings and there is no treaty, in most cases the WSOP will withhold 30% from the winnings and the player would have to file a 1040NR return to refund some if not all the tax withheld. There are approximately 30 countries where there would be no 30% withholding, such as France, Germany and Japan.
What steps do players have to take when they have winnings and backers?
The player is required to file 1099’s with the IRS to allocate the income to the backers. If the backers are non US citizens, form 1042 and/or 1042S are required.
What are some common misconceptions about poker players income?
All U.S. citizens are required by IRS to pay income tax on all winnings, including internet gambling, including off shore internet sites. Any income earned during the year and the corresponding tax should be sent in on a quarterly basis to the IRS, and not just with the return when filed.
What services do you provide to poker players?
Not only can Kondler and Associates help to minimize your tax liability from poker winnings, but you can also learn more about:
- Foreign Bank Account Issues IRS Reporting Issues
- U.S. Taxation of Non U.S. Citizens
- Chop Consulting
- Swapping or Selling Action
- 1099 Preparation
- Wealth Consulting
For more information, be sure to stop by the Kondler and Associates booth at the 2013 World Series of Poker. You can also call them at 702-433-7075 or head to their website to book a consultation.