Taxes

IHP

I would like to know if I have to pay taxes on the money that I earn from playing online poker. I haven’t paid any taxes thus far because I haven’t won a significant amount of money. But what would happen if I won over $100,000 during a year? I was reading about the tax laws on pokereh.com. The information on the site doesn’t make any sense. Here is some of the text from the site.

Thankfully, poker winnings both online and in casino poker rooms are non taxable at this time. The government is attempting to pass laws that will require you to claim any and all winnings from online gambling, but at this time, as a casual poker player, there is no need to claim your poker winnings.

Typically, the government sees all gambling in the same light. As a losing proposition for the majority of people. There are regulations, however, for "professional" gamblers. If you make a living playing cards, you are considered by the Canadian government to having a profession, and your winnings are taxable. If you "apply skill and investment to achieve a profit", you should be paying taxes. As quoted from the Canadian Customs and Revenue Agency: "Winnings derived from a dedicated approach to gambling is taxable income".

If you do play poker for a living, there is good news. The majority of the investments made to play poker can now be tax write offs. Travel, meals, hotel stays, etc. that are involved in your poker playing can now be written off.

Here is my question. Are you a professional player if spent 12 hours a day playing online and you earned $10,000 during a year? Or are you a recreational player if got lucky and won the Sunday million tournament on Pokerstars despite the fact that you spent less than 100 hours playing during a year?

Gogie

There isn't a black or white answer to your question. In tax law it's always a question of facts. The CRA would review the facts surrounding a particular case (i.e., in the case of a poker player, how often does he play, is poker his main source of income, etc., etc.) and make a decision based on those facts. A one time tournament win, even for hundreds of thousands of dollars, would not necessarily be considered taxable income. However, if you were considered a professional poker player by the CRA then all poker winnings would be taxable, regardless of where they were won (Canadian residents must declare their worldwide earnings when filing their tax returns).

Just a point of clarification - you "declare" income and "claim" deductions.

JimmyHo

I guess it also depends on your filing position for your tax return; if you decide to file on the basis of being a professional and try to deduct airfare, buy-in fees, etc. and end up with a loss from this business. If you win a large amount down the road, you will likely have to pay tax on it. Also if you are consistently claiming losses on your tax return for your poker playing to offset other income, you will be viewed as not have an expectation of profit and these losses will be denied. Best thing to do is keep poker as recreational so if you happen to win big, you will not have to pay any taxes. If you win a tournament in the US as an example, there are withholding taxes on the winnings and that is a whole different topic.

Unknown

Great post.

woller

Wow i just thought since i was in canada it was all tax free. Thanks for the info guys.

Unknown

Stargatefan006 wrote: »

Great post.

does anyone play ultimate bet on here?

Graham

Errrrr... doing my taxes now.... I think its always best to confirm with an accountant if there is a large sum of money involved, but otherwise if poker is not your main source of income, then AFAIK gambling winnings aren't taxed in Canada.

bluesky

I once tried asking some tax guy at H & R block and he said not taxable. Of course, after lots or reading. I have come to agree that it is.

I do not play poker as a main source of income because I havent that large of a bankroll however I may in the future. Should I keep track of my losses till I hit big?

Bumbaclat

bluesky wrote: »

I do not play poker as a main source of income because I havent that large of a bankroll however I may in the future. Should I keep track of my losses till I hit big?

Only if you're filing this year as a professional.

pkrfce9

Barton2 wrote: »

does anyone play ultimate bet on here?

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