Well, it’s here again: tax season. The two “dirty words” for any CPA to hear. It’s especially challenging for a CPA that specializes in poker players, most of which played on the Internet.
You can only imagine the fun I experienced on April 15, fielding frantic calls from hundreds (yes, hundreds) of poker players in a panic about their money being seized. On top of all this, I was trying to get out those last tax returns that were due. A lot of guys had so much money online that the last thing they could afford to do was pay taxes if the money wouldn’t be released soon. The choice was to pay rent and eat or pay taxes. Not a good situation.
Even today, nine months after Black Friday, many of my clients are struggling with many decisions and lifestyle changes. The last thing any of us want to do is think about taxes, right?
So, what do you do when you need to find out your wins and losses from Jan 1, 2011, to Black Friday? The first thing I suggest is to try to email the sites (don’t even try Full Tilt) to see if they will give you a record of your account for 2011. But, if you are like many people, your money is stuck online with no one to talk to and no records.
In this situation, my advice is to do the best you can. Most likely you can go back to your bank statements during that time and see what money you pulled from online sites. In these desperate circumstances, you just have to piece it together and file the most accurate tax return you can. The key is to have plenty of notes and backup to prove you were trying to prepare an accurate return. Save a copy of the emails to sites, show a record of where you got your numbers and document everything in case you were to get audited. Remember, an audit is usually several years after you file your return so don’t think you will be able to re-create everything years later.
If you’re a poker player and you cash in a tournament and they give you that nasty Form W2G, please don’t lose it. Why? The IRS matches those forms with your tax return and if you don’t list it on your return, you will get a huge tax bill, even though you probably claimed the income on your return. The bill will put you in shock and then you have to call your CPA and pay them to fix it for you. I tell my guys to mail or fax me a copy and I’ll keep it for them.
Be sure to file your taxes as best you can. If you had wins and losses, a tax return probably needs to be prepared. It’s better to deal with it now than to deal with IRS later.
— Ann-Margaret Johnston is a practicing CPA in North Georgia. She is the author of How to Turn Your Poker Playing Into A Business. Her website is pokerdeductions.com where you can find answers to commonly asked poker tax questions. Feel free to email her at email@example.com.