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New poker tax code clarified
Poker players can rest easy: a new poker tax code that was supposed to go into effect in March 2008 has been modified.
Originally the tax would have required the casinos to withhold 25% of a poker player's winnings (so long as it was over $5,000 profit), but the Internal Revenue Service and the casino industry have negotiated a better deal for both sides, according to a recent article in the Las Vegas Sun.
Instead of forcing casinos to withhold players' winnings, the IRS will require casinos to report winnings on a W-2G form. As always, individual players will be responsible for declaring their winnings when it comes to tax time. The new policy will take effect on March 4, 2008.
Withholding 25% of a player's winnings might have created difficulties for professionals who frequent the circuit because such players quite often need a considerable amount of cash to pay for buy-ins. This way, individuals will have a little bit longer to pay the tax man.
Surprisingly even the American Gaming Association appears pleased with the new compromise.
"The IRS was appreciative of our efforts to ensure the flow of tournaments," gaming association lobbyist Wally Chalmers told the Sun. "We're very happy with this procedure."
If a player refuses to fill out a W-2G form the casino will be obligated to withhold 25% of their winnings. The casino itself will be on the hook if it fails to report a player's winnings.
It's always suggested to keep a complete record of all your winnings and losses while playing poker.