Plan Ahead: Tax Information for Poker Players Heading to Las Vegas for the WSOP & Other Tournament Action

The 55th annualWorld Series of Poker (WSOP) runs May 28 to July 17, at the Horseshoe and Paris casinos on the Las Vegas Strip and players from around the world will be looking to get into the action. Numerous other tournament series are also on the poker agenda each summer as well. For those who score some nice winnings, paying taxes will be important and players from outside the U.S. need to know what to expect.

Tax Information at WSOP and Other Las Vegas Tournaments

The process isn’t always easy, but some key steps can help in the long run. Samantha Overman is with Kondler & Associates, a Las Vegas-based accounting firm that works with poker players and gamblers to make sure they meet their tax obligations. She understands the challenges poker players face in dealing with varying tax laws and recently spoke with SoMuchPoker to offer some advice on how to tackle this issue.

Those who don’t follow Internal Revenue Service (IRS, the American tax collection agency) guidelines can face some serious consequences. Kondler & Associates has regularly set up a table at the WSOP to help players facing IRS obligations and to provide advice on what to do, including for players outside the U.S.

“Foreign players face a key challenge at the WSOP: navigating the U.S. tax system,” Overman says. “For foreign players coming from non-treaty countries, the IRS imposes a 30% federal withholding tax on winnings over $5,000 net the tournament buy-in, deducted by the casino and remitted to the IRS on the player’s behalf. It is essential for foreign players to be aware of this withholding and plan accordingly for potential tax obligations to manage their prize money and bankroll effectively.”

What to Expect When Winning More Than $5,000

That $5,000 is the magic number when it comes to tax withholdings. Whether a country has a tax treaty with the U.S. is a key factor in the procedures taken after winning.

As Overman notes, foreign residents of U.S. tax non-treaty countries are subject to a 30% tax withholding. Gamblers from these countries can recoup these withholdings by filing a U.S. tax return. The refund amount is based on gambling wins, losses, and expenses, potentially reducing taxable income.

“Accuracy in documenting gambling activity, losses, and expenses is essential,” Overman says. “Applying for an Individual Taxpayer Identification Number will be required to submit a U.S. tax return.”

Foreign residents of U.S. tax treaty countries must provide an Individual Taxpayer Identification Number. The treaties make eligible players exempt from the standard 30% withholding tax and they can receive their entire winnings as per treaty agreements.

Those players that are residents of treaty countries, but don’t provide tournament staff with an Individual Taxpayer Identification Number will also face that 30% tax withholding.

Getting Prepared

No one can actually predict that they may score some big bucks at the WSOP or other summer tournament, but most are probably pretty hopeful. But getting prepared and having the right documentation can help when heading off to play with the chance of winning some substantial amounts of cash.

Even small inconsistencies or missing information can lead to additional headaches in the tax reporting process. Here’s a look at WSOP guidance for international participants:

• Bring a passport and additional form of identification showing a residential address, such as a driver’s license, signed lease agreement, utility bill, or mobile phone bill.
• Ensure your documentation matches the tax treaty country if entitled to tax treaty benefits.
• Check that personal information on your player’s card is correct before registering for tournaments.
• International players cashing in events for more than $5,000 net the tournament buy-in will receive Form 1042-S. Upon receiving tax forms, ensure all information is correct and reflects your details, including name, address, and amount won.

Record Keeping

For many poker players, the idea of record keeping might not fit with the freedom that comes with playing cards for a living. But Overman says that professional gamblers need to keep records to document their wins and losses –imperative for reducing your tax burden.

This makes tax reporting much easierand helps provide proof of income and work-related expenses in case a player ever received a dreaded audit. Here are some things to remember when keeping critical records:

• Make sure records of expenses are precise and track them consistently.
• Note the dates and duration of gaming sessions.
• Specify types of gambling, including cash games.
• Record buy-ins, cash-outs, and retain receipts or bank statements for expenses.
• For poker tournaments and slots, obtain win-loss statements from the casino based on your player’s card.

These suggestions also apply to online play as well. Additionally, it’s important to document any other expenses directly associated with gambling activities in the U.S., such as hotel accommodations, travel, and meals. These are legitimate expenses and can help offset a player’s winnings when filing taxes.

The poker world has seen quite a bit of controversy of late when it comes to players loaning or staking others and not being paid back. Overman says backing and staking agreements should also be considered when making financial and tax preparation.

It’s important to ensure backing and staking arrangements are clearly outlined in writing. Players should also include terms of repayment and that an agreement should be signed by all parties involved.

Seeking Out Help

Having a financial plan may require some outside help. Firms like Kondler & Associates specialize in helping players –handling much of their taxes while the player can focus on hitting the tables. These specialists can also help a player make sure they stay within the law and are paying the taxes they owe, while navigating what can be a confusing system.

“Given the complexity of U.S. tax laws and the individual circumstances of each player, seeking professional tax advice is strongly recommended,” Overman says. Consulting experts in international taxation and gambling income can assist foreign players through the processes.

“If eligible for a refund, there is a three-year window to submit a U.S. tax return. Tax returns for wins in 2024 can be submitted in the following tax year – 2025.”

Tax Treaty Countries

Curious as to whether your home country has a tax treaty with the U.S.? Here’s a look at the countries that currently have a treaty in place. Gambling income of residents from these countries is not taxable by the U.S.

*Gambling income of residents of Malta is taxed at 10%.

Complete Guide to Attending the 2024 World Series of Poker

*Article by Sean Chaffin