I'm from the U.S. To me I don't feel that it is the same because these online casinoes are usually based in other countries. I've used King.com run by UK and it's not really gambling but I play games and have won over 3,000 from that website competing with others. I've never claimed it on my tax forms. If i were to get audited how far back do they audit me? 1 or 5 years back?
It sounds like a stupid question, but really why do i need to file these for taxes?
2007-12-21 06:31:17 · 6 answers · asked by KnowMe 4 in Business & Finance ➔ Taxes ➔ United States
Simple answer, You are responsible as a US citizen to pay taxes on your WORLDWIDE income.
So, yes, you need to report the winnings and pay taxes on them.
In answer to your audit question. Generally the limit is three years. If you under report income by more than 25%, then the limit is 6 years, and if you don't file a return, or you file a fraudulent return then the statute NEVER runs out.
I hope that helps.
2007-12-21 06:35:18 · answer #1 · answered by Michael K 5 · 1⤊ 0⤋
Actually, you may be in for a VERY rude shock when you try to repatriate those winnings. It is illegal for anyone in the US (citizen, tourist, illegal, green card holder, etc.) to gamble on line. (The only exception is horse races and only in a few states.)
Most foreign gaming site operators will not be able to transfer your winnings to your US bank account. The bank will refuse the transaction as it is illegal for them to accept the funds. Ditto for a credit to your credit or debit card.
The gambling site's operator or any of its corporate officers can be subject to arrest upon entry into the US if the government has evidence that they illegally repatriated US funds. This HAS happened! The president of a UK corporation that runs a number of legal gaming sites outside of the US was arrested when he arrived in Chicago for a family holiday for illegally repatriating funds of US based gamblers. The operators of the foreign sites are well aware of this and most won't even attempt to transfer "your" money back to you.
Any attempt to repatirate the funds can result in confiscation of ALL of the money. Then it gets REALLY rude because the IRS will tax you on the winnings that you won't be allowed to keep! Although you can get a deduction for gambling losses in a casino in the US (up to your winnings and only if you itemize) you do NOT get a deduction for confiscated funds due to illegal activity.
This is EXACTLY the same situation that drug kingpins face. All of their assets are confiscated by the police, FBI, DEA, or whomever but the IRS will tax their estimated income from the drug dealing even though all of their funds and assets were confiscated!
If you do manage to successfully repatriate your money, I'd strongly suggest that you just list it on Line 21 as gambling winnings and keep your trap shut about the source! As I said, if you get caught out you'll be in for an exceedingly nasty and expensive surprise!
2007-12-21 14:32:18 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Yes. IRS regulations require that ALL income be reported.
You can confirm this from the IRS website: www.irs.gov
type in: foreign income or foreing casino income in the search field for information and filing instructions
2007-12-21 06:35:45 · answer #3 · answered by jwishz 7 · 0⤊ 0⤋
It doesn't matter where you get the income from. If you're getting income from anywhere, by law you have to claim it.
But on the other hand if you don't claim, how will they know, right?
It's up to you though, if you wanna take that risk. Not paying taxes is punishable by jail time.
2007-12-21 06:36:09 · answer #4 · answered by vic42482 2 · 0⤊ 1⤋
Consider the sportsbook-oriented sites. They have plenty of casino games, and are probably your most reliable, fastest payouts.
2016-05-25 08:04:45 · answer #5 · answered by scarlett 3 · 0⤊ 0⤋
Here's the rule of thumb for if you need to report your winnings: Did you receive a W-2G from them? If you didn't, then neither did the IRS.
2007-12-21 07:45:33 · answer #6 · answered by darkridr 6 · 0⤊ 2⤋