It does not matter if you are playing poker for fun or profit, it is important that you keep good records. Unless you have good records you will not know if you are winning or losing.
We all like to think that we are doing better than we really are. The records of your Texas Holdem wins, losses, and expenses will tell the truth. Don’t forget that income from a poker game is income so far as the IRS is concerned. You have to pay taxes on your poker winnings exactly the way that you would any other income. They are unforgiving if you don’t report it.
Poker as a Business
If you are determined to be a winning poker player then you might as well get used to the idea of keeping records. The more detailed you records the better of you will be at tax time. Don’t forget your mileage, food, and drink while at the casino. For those of you who like to play Internet poker you have the expense of your connection and your computer. All deductible. Poker is like any other business. The guy who succeeds, is the guy who does the paper work.
Start off with the date and time of day.
How long you played.
What game you played. Texas Holdem, Seven Card Stud, Five Card Draw, Omaha
What limit did you play. How long you played poker. Did you win or lose? How much?
It is more than likely that if you play poker in a brick and mortar casino or if you play online, you will see some of the same faces over and over again. You might want to start a poker players log. Of who, when, where. And if they have any tells. What kind of player they are: tight passive style player, loose passive style player, loose aggressive player, tight aggressive player,…
You Can’t Bluff The IRS
Imagine this. You have had a good night and decide to have a drink at the bar while you wait for your ride home. You get to talk to a couple of guys and mention that you just won $2000.00 playing Texas Holdem. They are impressed and ask if you are usually that lucky.
Like anybody, you like to talk more about your victories than you defeats so you might mention other good nights that you have had. It takes you about twenty minutes to paint yourself as a Poker King who has won thousands upon thousands of dollars. It is then when one of them whips out an IRS badge and asks for your name and Social Security Number.
Unless you have the records to itemize your deductions you will be paying taxes on all of your wins and get no credit for gambling losses or expenses. While this may sound like an unlikely scenario you should be aware that there are IRS agents in every brick and mortar casino.
Your Poker Stake
If you play poker then it is a guarantee that you will have good days and bad days. A bad run of cards is something that every gambler faces. When you start out, or right now. Establish how much you are willing to risk at the feet of Lady Luck. Take a hard look at your finances and decide how much you are willing to risk. Put that much aside and keep it separate from your other money.
Let your bankroll build up. There will be a time to take profits later. You want to build your stake up to the point that even the most disastrous run of rotten luck will not wipe you out. Make sure that you have at least doubled your stake before you move up to a higher stakes game. When it is time to take the profits you still don’t get to spend all of it. Take a third for yourself, add a third to your bankroll, and set aside a third for the tax man. He will have his.
In summary the tip is that if you are not keeping good records it is doubtful that you will be the one in twenty that will be a winning poker player.