Strategy with Kristy: Tax Time
Tax day is quickly approaching in the U.S., so for the latest edition of the Strategy with Kristy podcast, host Krist Arnett talks to Theresa Fox, a tax preparer who specializes in poker. The two discuss general guidelines for filing as a professional poker player, effects of Black Friday on taxes, and suggestions for international players coming to the U.S. to play poker.
Here is a snippet from the interview:
I take care of a lot of international tax issues because we have so many players come in and do well here. Taxes and gaming go hand-in-hand, and it’s a big issue. There are a lot of countries that we have treaties with and that can produce a lot of tax problems. If you’re a foreigner coming to the United States, you should know, in advance, if the U.S. has a treaty with your country. That may impact if whether you decide to play, and it will impact how much you anticipate winning. You need to know in advance. Is the U.S. going to withhold 30 to 35 percent straight off the top of what you win? If they are, that could impact if you’re going to get staked or not. I’ve seen so many problems with people coming here, getting staked and having the great problem of cashing. All of a sudden, they want to pay their stakers but a lot of the money gets withheld. The only way to get any of that money back is by filing a non-resident tax return and doing what we all do which is prove our expenses. It can be an issue.
What I would suggest for foreigners coming here is to know whether you live in a treaty or non-treaty country, bring lots of identification and documentation with you to show what country you live in, and if you don’t already have one, get an Individual Taxpayer Identification Number (ITIN). That, in essence, is what us Americans call a social security number. It’s how our IRS system identifies you. If you don’t have an ITIN, a tax preparer can’t put together a tax return for you. File for that while you are here. It’s a time-consuming process, so get that started while you’re here. The casinos typically can help you, but I’ll be very honest. It’s a service they provide, but they don’t do a very good job following up. I’ve seen so many foreigners go through the casino, but if there’s a problem, they get zero customer service.
The IRS has what’s called a Certified Acceptance Agent. Find one while you’re here in the United States. They are basically like a notary, but they are allowed to do foreign documents. They will help you do the application. So, get an ITIN while you’re here or at least apply for it. If you do get that score, you are ready for it. Then you can go home and file taxes from wherever you are. With technology these days, sometimes I don’t even see my clients. Without an ITIN though, we’re starting from scratch. If you have an ITIN and you are from a treaty country, you actually wouldn’t have to have any money withheld. Setting up an ITIN in advance will save you a lot of hassle and stress while you are here and then you can concentrate on playing.
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