Should money earned from online gambling be reported to the IRS?
Question by RockStar: Should money earned from online gambling be reported to the IRS?
Online gambling was made illegal in the US a couple of years back but there are a few (mostly Canadian) sites that still accept US players. Even though it is illegal in the US to gamble online, should an individual include those profits on their federal tax return?
I guess my question is: If one reports the income then that individual admits to ‘breaking the law’ but if they don’t then they are breaking the law by withholding taxable income from their tax return.
Answer by Old Kid
legally, yes. You are supposed to report all your income, at least over a certain amount.. I don’t know the amount but it may be like 0.00 or something.
Check out the IRS website for more info.
http://www.irs.gov
Should…yes
If you cash out 2500 or less and cash the checks at your local check cashing store, you will (should) be fine. It has worked for me for years. There have been cases if Finland or Sweden where on line gambling is regulated that poker sites have been forced to turn over personal information and the winner was jammed up. To my knowledge no American has had to face that…yet.
Yes, but you should report it as general gambling income. The risk is simply too great if you don’t report it and you open a whole can of worms if you don’t report it, get audited and it’s discovered that it was online gambling revenue.
On the plus side you can offset the winnings by declaring losses from gambling if gambling is your primary source of income. I have no idea how this works but I know that many professional poker players use this method to offset their wins and losses.
The law change a couple of years ago did not make it illegal to gamble online. I have included some information on that.
Also, it would be incorrect to state that most gambling sites are Canadian. That simply isn’t true.
If you win a significant amount of money online and then place it in an American bank account, you should definitely report it to the IRS and pay your tax on it.
The government has not got a history of arresting people for gambling on the Internet. But tax evasion, they would love to make an example of you for that.
By the way, the anti gambling bill you refer to actually made it 100% legal for American companies to offer online horse race betting. So if that’s your thing there is no gray area, it is offered extensively these days.
Guess which industry put up a big bribe to certain politicians?!?
yes, it should be reported, but usually the amounts are too small to make a difference. amounts over 10k should be reported, however.
You Should Report Everything Over 600 Dollars
You are supposed to report gambling income, howveer i recomend you consider this:
If you are playing a negetive expectation game and you continues to play it say during next years tax season, it is not a matter of if but a matter of WHEN you lose the money you have just won.
If you pay taxes on your winnings this year then proceed to lose that much next year, the government will not give youa refund on your taxes for the previous year.
You will lose it eventually and you will infd yourself, having payed taxes in vien for money you no longer have.