Bankroll vs US Taxes owed

[paulwright]

Hi all,
Just a question / point I want to make in regard to bankroll management.
Assuming most US players will pay taxes on poker / casino winnings + bonuses + rakeback etc received this year... do we need to factor these taxes owed into our bankroll? It seems so...

Lets say you have just started playing this year - and have a roll of 10k. Come January / April whatever - at worst - you may owe 4k to the taxman. Should as far as buy-in rules etc go - you should think of your 10k roll as only 6k. So now instead of being rolled 400NL - you are actually only rolled for 200NL.

So given everyones different marginal tax rates - I think US players should consider their bankroll to be what it was a start of the year - less x% (say 30%) of winnings to that point in the year...

You get the idea... open to discussion...

Cheers, Wrighty

[sejje]

I've decided that if they want to make it illegal, I'm sure not paying taxes on it.

But certainly you're correct in your assumption. You could "tax" yourself as your bankroll increases and set the money aside.

[DaNutsInYoEye]

I've decided that if they want to make it illegal, I'm sure not paying taxes on it.

From the IRS' perspective they don't care where your money comes from. Even under the new legislation it's not illegal to play online poker anyways.

[paulwright]

OK - well now I have had time to think about this - I am certain my logic was slightly bogus - but on the right track.

I now think the best way to think about this is in terms of "annual poker income". Once you know how much poker money was made from Jan 1 to Dec 31 you should adjust your bankroll on Jan 1 (because in theory you just lost a serious number of buy ins to the IRS overnight - but at least you know the exact amount).

You will probably need to realign yourself at a new level at that point due to your smaller bankroll (unless you were heavily over-rolled).

But during the year I think you should play at limits in line with your full roll up until Dec 31 - this maximizes your income during the year vs risking going bust when tax man comes knocking and you are in the middle of a hefty downswing...

My thoughts FWIW...

Cheers, Wrighty