Wednesday, July 08, 2009

Taxes and the World Series of Poker Tournament

Yesterday marked the beginning of the World Series of Poker tournament, and according to reports over 800 people were turned away. Although the potential players all had their $10,000 buy in, the tournament’s organizers put a tight cap on the number of people who could participate.

"We are sorry, and I am sorry," claimed the World Series of Poker commissioner Jeffrey Pollack. "The last thing that we ever want to do is deny people entry into our events."

According to the Associated Press there were 6,494 players competing for a part of the $61 million prize pool. The top prize is estimated to be a staggering $8.55 million, but remember that all gambling winnings are technically taxable income.

The IRS’ website claims that all gambling winnings “must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.”

“A payer is required to issue you a Form W-2G (PDF) if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported irrespective as to whether any portion thereof is subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.”

For more information on taxes and gambling – including how to deduct losses – check out this page on

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