Paying Taxes On Blackjack Winnings
In Australia, recreational gamblers don't pay tax on winnings but the ATO did go after Zeljko & Co some time ago. I understand he did have to pay up but the settlement was confidential. Last edited by davethebuilder; at 08:20 PM.
- Your state will tax the winnings too, unless you live in a state that does not impose a state-level income tax. The tax rate will be determined by your income. So, for instance, if you make $42,000 annually and file as single, your federal tax rate is 22%. If you win $1,000, your total income is $43,000, and your tax rate is still 22%.
- In Trip A, you won $6,000 in poker. In the Trip B, you lost $8,000. You must list each individually, with the winnings noted on your return as taxable income and the loss as an itemized deduction in Schedule A. In this instance, you won’t owe tax on your winnings because your total loss is greater than your total win by $2,000.
- In most cases, the casino will take 25 percent off your winnings for the IRS before paying you. Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-G forms are not required for winnings from table games such as blackjack, craps, baccarat, and roulette, regardless of the amount.
After two exciting weeks, the 2019 World Series of Poker Main Event is over, and Hossein Ensan of Germany now stands as poker's latest Main Event champion after topping the field of 8,569 to claim the $10 million first prize.
Dario Sammartino of Italy took second for $6 million, Alex Livingston finished third to win a $4 million prize, and each of those making the final table earned at least $1 million for having done so.
Or did they?
As he does each year, federally licensed tax professional, poker player, and writer Russ Fox has shared with the poker world his annual look at the tax obligations faced by each of the nine players who made the WSOP Main Event final table. As Fox has shown before, when we say a player has won a certain, eye-popping amount for winning the Main or making the final table, the player's actual profit is often something less than the reported total thanks to having to pay income tax on the winnings.
In his article 'Location, Location, Location: The Real Winners of the 2019 World Series of Poker,' Fox looks at how the nine players' nationalities will affect their respective tax burdens, showing how almost all of them will be giving up a significant percentage of their winnings. In fact, when added up the total amount taken out of the nine players' prizes will exceed (once again) even the first-place prize.
We've been reporting on Ensan here at PokerNews for a long time, and indeed ever since we've known him he's always said he considers himself an amateur player (see, for example, this profile of Ensan from a European Poker Tour final table five years ago). Ensan again has reiterated his status as an amateur player in interviews both before and after his win this week.
While Ensan saying so fits well with his overall humble and amiable personality, Fox points out how in Germany his status as a professional or amateur is important when it comes to determining his tax obligation. A federal law passed in Germany two years ago 'ruled that professional gamblers must pay income tax on their net gambling winnings (less expenses),' and that 'amateur gamblers do not have to pay income tax on gambling winnings.'
As Fox explains, if Ensan does have to pay tax on his $10 million prize, he will owe more than $4.6 million in taxes to the Bundeszentralamt für Steuern, Germany's Federal Central Tax Office.
Among the other eight players, only seventh-place finisher Nick Marchington escapes having to pay tax on his $1.525 million prize since the United Kingdom does not tax gambling winnings. (This is one reason, Fox notes, why many German poker pros have taken up residence in the UK.)
Meanwhile, each of the others will be paying taxes, in most cases to their home countries and in the U.S. to home states as well. The Canadian Livingston will not have to pay tax in Canada on his winnings but will owe 30 percent of his $4 million prize to the US due to a tax treaty between the two countries.
Fox explains as well how ninth-place finisher Milos Skrbic would have been taxed differently if he lived in his native Serbia, but he currently lives in California. In either case, though, Skrbic would owe a great burden — calculating it as a California resident shows he will owe the most of all the players, percentage-wise (about 47.4 percent), when it comes to paying taxes on his $1 million prize.
Here is how all of those figures break down for the nine players making the final table:
| Position | Player | Prize | Tax Owed | Prize After Taxes |
|---|---|---|---|---|
| 1st | Hossein Ensan | $10,000,000 | $4,606,469 | $5,393,531 |
| 2nd | Dario Sammartino | $6,000,000 | $2,572,350 | $3,427,650 |
| 3rd | Alex Livingston | $4,000,000 | $1,200,000 | $2,800,000 |
| 4th | Garry Gates | $3,000,000 | $1,050,813 | $1,949,187 |
| 5th | Kevin Maahs | $2,200,000 | $870,729 | $1,329,271 |
| 6th | Zhen Cai | $1,850,000 | $706,679 | $1,143,321 |
| 7th | Nick Marchington | $1,525,000 | $0 | $1,525,000 |
| 8th | Timothy Su | $1,250,000 | $491,150 | $758,850 |
| 9th | Milos Skrbic | $1,000,000 | $474,463 | $525,537 |
If Ensan does have to pay taxes on his winnings, the total collected from all of the players adds up to $11,972,653 taken out of the $30,825,000 in prizes for the top nine finishes. That's just under 39 percent, and even more than the $10M first-place prize.
For further details from Fox’s analysis, check out his article.
Tags
WSOP2019 WSOPWorld Series of PokertaxesHossein EnsanDario SammartinoAlex LivingstonGarry GatesKevin MaahsZhen CaiNick MarchingtonTimothy SuMilos SkrbicRuss FoxRelated Tournaments
World Series of PokerRelated Players
Dario SammartinoHossein EnsanGarry GatesZhen CaiAlex LivingstonMilos Skrbic
Are online gambling winnings taxable? Yes, whether you gamble at land-based or online casinos, the money you earn is subject to federal income tax. Known as gambling income, the money you earn from wagers and bets as well as lotteries, sweepstakes, etc. all must be taxed.
In some cases, you will be provided with tax forms that must be turned in to the federal government. The full amount of the gambling income minus the cost of the winning bet will be included on this form. Whether you receive this form or not, it’s important to know your responsibilities when it comes to filing income taxes.
The process of handling gambling taxes is not difficult if you know what to do. With this in mind, the OUSC team created this quicktax guide to help US players report their online gambling income.
Do US Players Have To Pay Taxes For Online Gambling?
So, if you enjoy online gambling at sites like BetOnline or Bovada Casino, do you have to pay taxes? When you choose to gamble online, the money you earn is still taxable. Even if the site is located in another country, you still have to pay taxes.
Online gambling is unregulated in most regions of the US, but taxes must still be paid. Just because you do not receive tax forms, does not mean that your winnings are not taxed.
To the IRS, it does not matter where the money is either. If you have funds in your online casino account, even if it’s an offshore site, it’s taxable. When dealing with online gambling earnings, it’s important to review this information with an accountant to ensure you pay the right amount of taxes owed.
Below you will find a list of gambling activities that the International Revenue Service considers taxable:
- Prizes
- Private Party Games
- Tournaments
- Scratch Off Tickets
- Other
How Do You Report Gambling Winnings?
The way you report your gambling activities will be dependent on how you win. If you receive a Form W-2G, then this is what you will turn in when filing taxes. Taxes must be filed before April 15th or you must ask for an extension. You will turn this form in as you do your other tax forms for employment to an accountant or tax filing company.
Paying Taxes On Blackjack Winnings
If you do not receive the W-2G form, then you will need to fill out a Form 1040, adding the winnings to Line 21 of the form. The full amount of gambling winnings will be placed on this line.
When filling out the 1040, you will need to configure your losses as well. The expense you had for bets, wagers, etc. will need to be deducted as an itemized deduction. This is done on the “Other Miscellaneous Deductions” line of Schedule A form. This will help to lower the tax amount paid on your total gambling income.
Paying Taxes On Blackjack Winnings Odds
What Types of Records Do You Need?
Paying Taxes On Blackjack Winnings Payout
The information you record while enjoying online gambling can be used during the filing process. It’s important to maintain a log or diary of all your losses and winnings. Keep in mind the following information:
Paying Taxes On Blackjack Winnings Rules
- Dates: You will need to record the date and type of activity completed, including wagers and winnings.
- Location: List the name and location of the gambling facility. In the case of online gambling, this would be the website, such as MyBookie or Café Casino.
- Checks: If you are sent any checks in the mail from winnings, be sure to keep the check stub.
- Paperwork: For some players, winnings will be sent via mail and any paperwork should be kept and used during filing as needed.
Don’t Forget To Pay Your Online Gambling Taxes
When you gamble online, it is important to enjoy yourself, but also remember to file your winnings! The IRS takes gambling money very seriously and you want to be sure that you pay your taxes accordingly. If you need any additional information, be sure to visit the official website of the IRS to find all the previously mentioned forms you will need fo file your taxes.