Can You Make A Living Playing Online Poker?

Many People Have Decided To Take Up Poker While Being Quarantined. –

There are many ways to make money on the web, and online poker is definitely a legitimate one to do it. In fact, there are thousands of professionals who play online poker on a daily basis and earn good money from it. Therefore, to answer the topic question right away — yes, you can make a living by playing poker online.

However, that’s not the right question to ask at all, so let me make a little correction right away. The right question should be this – How hard is it to make a living by playing poker on the web? Now, this is definitely something that you’re not going to like. It’s pretty difficult and requires a lot of practice, dedication, and sacrifice.

Poker player Adrian Sterne from Top10PokerSites.net published a well detailed article on making a living by playing poker online, Feel free to check that out if you want to learn more. Online Poker Is a Job One thing you should understand is that making a living by playing online poker means accepting that this type of activity is a job at which you have to perform exceptionally well to earn your wage.

• Therefore, if you consider it just an interesting pastime, you might earn some and lose some, but you’ll not be able to make a living out of it.
• As soon as you understand that you have to devote your time, energy, and money to it, you are on the right track to become a professional poker player,
• Understand How to Earn from Online Poker Earning from playing poker means understanding the way money flows within this game,

The first thing you should take into account is that the majority of people play it for fun. Some might be good at it, but the reality is that many of them are fish. Aiming for fish is something that all professionals do, as that is almost a certain profit.

Players who understand how to play against new and inexperienced players have a firm ground from which they can take off and play poker. However, playing against fish is definitely not your main source of income. Once you have enough capital to invest in the game, you would be able to see higher returns.

Simply put, playing low-stake tournaments and cash games is not as lucrative as playing high-stake ones. If you’re good enough to beat opponents at high stakes, you can earn more money. One of the important things you immediately need to understand if you want to earn money from online poker is that variance shouldn’t affect you.

• Professional poker players know that they might lose their entire stack and are ready to make such a loss on a short-term basis.
• In other words, they accept that the element of luck is an inevitable factor in playing poker and that they will have periods when they lose more than they win.
• It’s Often Very Risky No matter how good they get, every professional player on the web who earns a lot of money this way is ready to risk.

When you think of it, the risk is an inevitable part of starting any business. In fact, it’s a part of life and, as such, it’s present in the game of poker. Imagine starting a business that offers products for professional athletes. You started it in December 2019 and your business began booming right away, as top-rated athletes have been buying your products.

Then, all of a sudden, a pandemic kicks in, pulling all sports events to a halt. You’re out of money, but that was the risk you were willing to take. The same goes for poker. Although pandemic might not really affect it, there are many ways that can make you hit the rail before you even start. The good news is that the more you practice and the more you study, the element of luck would have a lesser impact on your game.

You’ll Have a Lot of Studying to Do Being a successful online poker player is something that requires you to watch hundreds of videos and read dozens of books about poker. Poker is a simple game on the surface, and it’s definitely entertaining to play from time to time.

• However, there’s a lot of theoretical knowledge that you have to acquire before you can call yourself a professional player.
• Many great poker players, such as The Godfather of Poker himself, have “written useful books “:https://www.goodreads.com/book/show/16572.Doyle_Brunson_s_Super_Systemthat are often regarded as obligatory reads for all players who want to go pro.

What the majority of these books deal with is mathematics, and the sooner you accept that fact, the better you’ll become. Playing poker on the web as a professional means dealing with a lot of numbers, stats, odds, and whatnot. It means being able to calculate the best possible outcome of your hand and make the mathematically most accurate decision.

1. It takes time to master that.
2. I’m not talking about days or weeks — I’m talking about years and years of experience.
3. You don’t really have to be a talented mathematician to do it, you just need to understand these processes right away and apply them to your online poker sessions.
4. Final Thoughts: Professional Poker Is NOT for Everybody Like it or not — we’re born with certain talents.

Although I agree that the talent is 2% and hard work 98%, I also understand that those without that 2% of talent would never be able to perform at 100%. Sadly, earning in online poker to make a living requires being at the top 10% or at least the top 20% players on the platform you’re using.

• To do that, you need to have at least some talent.
• But what exactly is a poker talent? It’s the skill of being able to read people and their actions.
• It’s sometimes more like intuition than a skill.
• This can be learned with time, but some people would require much more time to master it than others.
• Sadly, some players never master it.

Therefore, the best approach to playing online poker is to accept the fact that it’s not for everybody. It requires a specific combination of talent and hard work that only some people have.
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How much money can you make playing online poker?

How much money can you make playing online poker in 2022 is a question that I often get asked. There are a lot of different factors that can influence this such as your winrate, how often you play and if you multi-table or not. Here is a short answer. Winning poker players at stakes like NL2, NL5 and NL10 can expect to make around $100 – $500 per month.

Winning poker players at higher stakes like NL25, NL50 and NL100 can make significantly more though, between $750 and $2000 per month. Rakeback and bonuses will often add hundreds of dollars more. However, these are just rough numbers for an average person who plays semi-regularly, multi-tables a bit and takes the game fairly serious (i.e.

studies their hands, reads books, table selects etc). So in this article I am going to break it down limit by limit at the micro stakes and talk about just how much money a typical poker player should expect to make. And also, how you can make more!
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Is it worth playing online poker?

People ask me all the time is poker still profitable in 2022 or not. Or they want to know if you can still make a lot of money playing online poker in particular. So here is the short answer. Yes, poker is still very profitable in 2022 but you have to be willing to work hard to get it.

• It is not as easy to make big money in poker anymore.
• You have to study a lot more and have a professional approach to the game.
• But some people are pessimistic about poker these days with the tighter games and governments constantly meddling in the industry, just to name a few reasons.
• So in this article I am going to discuss why poker is still profitable these days and how to ensure that you are maximizing your success at the tables.

There is no question that the games today are simply harder to beat than they were 5 or 10 years ago. Many fish have either gone broke or quit. And many people have simply learned to play better. Now if you play at the lower stakes in particular there are obviously still clear exceptions to this that you can find all the time.

For instance, really bad players like this can often be found at NL2 and NL5 online: But all and all, this is a natural progression, less fish overall. There are very few people who are just going to keep giving away their money forever. This is why it is so important to constantly keep bringing new players into the game and to make sure that poker stays in the public eye.

But a lot of people forget that the time of the “poker boom” (which was roughly between 2003 when Chris Moneymaker won the WSOP Main Event and 2011 when Black Friday hit the US poker market) was really a unique time in poker history. In fact, it was a total outlier really.

Unless we somehow hit it big in Asia one day (China in particular) we are just unlikely to ever see something like this happen again. Let me explain for those of you who are newer to the game. During the poker boom everybody and their dog was playing poker. It was all over the TV every night and every celebrity was wanting to be seen playing the game.

In short, it was the “cool” thing to do in popular culture. This meant tons of loose action and tons of bad players. I remember railbirding (watching) some high stakes games at the time and there were people playing online at limits like $5/$10 and $10/$20 with thousands of dollars on the table who barely knew the rules of the game! You really can’t even compare the games of today to this time period (especially early on in the poker boom, ’03, ’04, ’05, ’06) because this was a unique moment in poker history that is very unlikely to ever happen again. Poker is a game that has a large and loyal following whether it is played in casinos, home games or online. However the game of poker still doesn’t have that true breakthrough appeal to the much broader public like movies or video games do for instance.

And there is nothing wrong with this at all! Most people will likely always view poker as a game of luck similar to other casino games. And quite frankly, I am totally fine with that. I don’t want them to educate themselves and understand that it is a game of skill that can be beat. That there are certain fundamentally sound poker strategies that I use to beat them again and again.

Because that would reduce my edge. I want them to keep thinking that I just get lucky all the time. So they can keep deluding themselves into thinking that they will finally beat me when their luck turns around. But this large level of ignorance will also prevent the game of poker from ever gaining that huge level of mass appeal again (and huge amounts of dead money with it).
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Can playing poker be a career?

What is a Professional Poker Player? – Duties As an experienced professional poker player, you would need to perform the following tasks:

• Gain an in-depth knowledge of the game via extensive research and networking with people in the industry.
• Regularly engage in the game at different levels of difficulty to develop the strategic skills necessary.
• Manage your finances effectively and choose tables or stakes in keeping with your budget and skill.
• Maintain records of your previous playing performances and evaluate the data to minimize past errors going forward.

Day In The Life While having a career in poker might seem easy, there is much more to it. Besides having solid skills in the game, you will be spending time tracking your schedule and ensuring that you are tuned into the best tournaments, either online or in real time.

• An experienced online player will be signing in to tables first thing in the morning to play at a live game.
• The beauty of online poker is that at some place in the world, there is a game taking place.
• Many poker players in Vegas head to the tables for three to four hours in the morning, before heading off for lunch.

While a few people are full-time professional poker players, most have to balance a day job and evening outings to play poker matches. You may spend many of your breaks at work reading up poker books or browsing websites to watch game strategies. Once you reach a level of expertise, you will travel frequently throughout the year to attend real-world tournaments.

This involves many hours sitting at a poker table and being clear-headed against other players under casino lights. If you treasure a fast-paced life of action, this is an exciting career path for you! Work Schedule And Typical Hours As with any other profession, you need to invest some hours in a day to practice and hone your skills.

In addition, you may also travel many times in the year due to poker tournaments located at various locations across the country, and even internationally. This is a game that will require long moments of concentration and isolation. The risks are also high and result in high-stress levels for the most experienced of players.

• While a pay-check is not guaranteed from month to month, you will enjoy the rush of the game if you are dedicated to the craft and able to stay positive even in the face of failure.
• Growth Of The Job Poker is always an exciting career and once an individual gains the knowledge, it is also a perfect alternative for huge profits in no time.

However, there is not much opportunity for career growth since this field is fiercely competitive with many poker pros looking for their big break. Typical Employers While professional poker players work independently in the field, several choose to supplement their poker winnings with a full-time or part-time day job.
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Can you become a millionaire from poker?

NOTABLE MENTIONS – Obviously, professional poker is a lucrative business. It’s estimated that there are hundreds of players who have earned over a million dollars playing this card game. For that reason, we couldn’t discuss all of them. Instead, we picked the 10 poker millionaires whose stories of success caught our eye.
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Do online poker sites report to IRS?

Do online casinos report winnings to the IRS? – It depends on if you’re playing at licensed US online casinos or offshore casinos AND what games you’re playing. Offshore casinos that operate outside of US jurisdiction will not report winnings to the IRS,

• If you’re playing at a state-licensed online casino (ie.
• In a state with legal online gambling sites like Nevada, New Jersey, Pennsylvania, or Indiana) then the casino will report any video poker or slot machine win over $1,200, which you should receive form W2-G for reporting.
• Casinos don’t report winnings on table games unless you win $600 or more and 300x your wager,

NOTE: You’re still legally responsible for declaring your winnings to IRS whether or not they get reported.
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Is online poker a good side hustle?

Final Thoughts – So can poker be your side hustle? Well, yes it can. Making relatively low sums of money each month such as $200, $500 or even $1000 is not too hard. And the great part is that you don’t need to spend years of your life studying complicated advanced poker strategy.

1. You will have to learn some basic poker strategy and start learning a little bit of advanced theory as well.
2. But overall, a dedicated beginner should easily be able to make any of these amounts within 6 months.
3. Now I do need to warn you though that poker is not an easy game anymore these days and most people actually end up losing at in the long run.

This is mostly due to factors like tilt and poor bankroll management though. I have written about this extensively on this website though and in my free poker guide so you can be prepared. Thanks for reading and I hope this article gave you some points on poker as a side hustle and whether it is the right fit for you or not.
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Is online poker all luck?

Are the world’s most successful poker players products of hard work and skill? Or are the highest-earning players in the history of the game simply the luckiest? The debate on whether poker is a game of skill or luck will probably persist for as long as poker exists.

1. Like all gambling games, luck does play a major role in poker, especially in the short term.
2. Poker is different than any other form of gambling, however.
3. Unlike the other games on a casino floor, poker is a game of skill, and the world’s top pros make money because they’re the best players in the game.

Let’s take a look at what makes poker a game of skill:
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Do you need high IQ to play poker?

I have played for money as a professional poker player for over 10 years now. The ride is definitely a rollercoaster that takes a specific skill set in order to excel. It takes a lot more than just pure intelligence or a high IQ to win at the game. In fact, just being smart might be the least important quality that leads to success.
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Do you have to pay taxes on online poker winnings?

The following rules apply to casual gamblers who aren’t in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.
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Is poker a stressful job?

2. You’ll Become Comfortable with Stress – Poker is stressful, but that’s what makes the game great. To be a successful poker player you need to be able to step outside your comfort zone and get involved in uncomfortable situations. As Doyle Brunson says, “It takes courage to sit down at a poker table.” Everyone in the room is trying to take your money.
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Is poker a 100% skill?

There are many people out there who scoff at the thought of playing poker, deriding it as a simple game of luck, just like all other casino games, such as roulette and slots. To put it bluntly, however, these people are entirely wrong and don’t understand the finer points of the game – the finer points that allow a player with skill the chance to gain a huge upper hand over their opponents.

1. Poker is a game that combines elements of both skill and chance.
2. While the outcome of each hand is determined by the cards that are dealt, players can use their knowledge, experience, and strategies to increase their chances of winning.
3. This means that poker is not purely a game of chance like some other forms of gambling, such as slot machines or roulette.

However, it is also important to note that the element of chance is still a significant factor in poker. Players can have the best hand and the best strategy, but they can still lose if they are dealt poor cards or if their opponents make unexpected moves.

As a result, some people consider poker to be more of a game of chance than a game of skill. Overall, the question of whether poker is a game of skill or a game of chance is a complex one, and it depends on how you define these terms. Some people believe that poker is primarily a game of skill, while others believe that it is more of a game of chance.

Ultimately, the answer may depend on individual perspectives and experiences. There are also others, most often poker evangelists with an unwillingness to admit the truth, who state that poker is a game based entirely on skill. The thing is, they’re also wrong, as the game is actually a mixture of skill and luck – an intoxicating fusion of a player’s ability to make the most of their cards, with fortune’s fickle mind helping and hindering players in equal measure.
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Is poker mostly luck or skill?

Chess requires playing ability and strategic thinking; in roulette, chance determines victory or defeat, gain or loss. But what about skat and poker? Are they games of chance or games of skill in game theory? This classification also determines whether play may involve money.

Prof. Dr Jörg Oechssler and his team of economists at Heidelberg University studied this question, developing a rating system similar to the Elo system used for chess. According to their study, both skat and poker involve more than 50 per cent luck, yet over the long term, skill prevails. “Whether a game is one of skill or luck also determines whether it can be played for money.

But assigning a game to these categories is difficult owing to the many shades of gradation between extremes like roulette and chess,” states Prof. Oechssler. Courts in Germany legally classify poker as a game of chance that can be played only in government-sanctioned casinos, whereas skat is considered a game of skill.

This classification stems from a court decision taken in 1906. One frequently used assessment criterion is whether the outcome for one player depends more than 50 per cent on luck. But how can this be measured objectively? It is this question the Heidelberg researchers investigated in their game theoretic study.

Using data from more than four million online games of chess, poker, and skat, they developed a rating system for poker and skat based on the Elo method for chess, which calculates the relative skill levels of individual players. “Because chess is purely a game of skill, the rating distribution is very wide, ranging from 1,000 for a novice to over 2.800 for the current world champion.

• So the wider the distribution, the more important skill is,” explains Dr Peter Dürsch.
• In a game involving more luck and chance, the numbers are therefore not likely to be so far apart.
• The Heidelberg research confirms exactly that: the distribution is much narrower in poker and skat.
• Whereas the standard deviation – the average deviation from the mean – for chess is over 170, the other two games did not exceed 30.

To create a standard of comparison for a game involving more than 50 per cent luck, the researchers replaced every other game in their chess data set with a coin toss. This produced a deviation of 45, which is still much higher than poker and skat. “Both games fall below the 50 per cent skill level, and therefore depend mainly on luck,” states Marco Lambrecht.

1. Skill, however, does prevail in the long run.
2. Our analyses show that after about one hundred games, a poker player who is one standard deviation better than his opponent is 75 per cent more likely to have won more games than his opponent.” In principle, the method can be applied to all games where winners are determined, report the researchers.

The percentage of skill in the popular card game Mau-Mau, for example, is far less than poker, whereas the Chinese board game Go involves even more skill than chess. Story Source: Materials provided by University of Heidelberg, Note: Content may be edited for style and length.

MLA APA Chicago

University of Heidelberg. “Skat and poker: More luck than skill? Economists develop rating system.” ScienceDaily. ScienceDaily, 21 August 2020. University of Heidelberg. (2020, August 21). Skat and poker: More luck than skill? Economists develop rating system.
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What is the average salary of a poker player?

As of Nov 22, 2022, the average annual pay for a Poker Player in the United States is $42,591 a year. Just in case you need a simple salary calculator, that works out to be approximately $20.48 an hour. This is the equivalent of $819/week or $3,549/month.
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What poker does to your brain?

Medical benefits of playing Poker – Reduces risk of Alzheimer’s disease Alzheimer’s is known to be a neurodegenerative disorder that has a genetic predisposition and no certain cure has been recognized as of now. However, it can be prevented with certain cognitive sports and poker is one of them.

1. Studies have shown that playing poker can actually reduce your chances of developing brain-related diseases like Alzheimer’s by over 50 percent.
2. Leads to rewiring the brain Poker acts like Pushups for our brain.
3. It strengthens your brain and shields your nerve cells.
4. Playing poker can help to rewire your brain and help to create myelin for a longer run.

When we perform any activity consistently, it leads to the creation of new neural pathways. The nerve fibers are surrounded by a myelin sheath. This protects and nourishes the nerve cell. The more often impulses are transmitted through this network, the thicker the myelin sheath becomes.

This is called myelination. Hence, the more poker we play the more myelin our brains create. Poker also helps in controlling emotions and making quick decisions that increase cognitive capacity, hence improving your chances of keeping a healthy brain. There are many ways in which poker is useful for the brain.

In fact, it develops a host of skills in us. Mentioned below are the key ones:

While playing poker players tend to be totally engrossed in the game, trying hard to think about what moves the others are planning. This enhances their concentration, attention, problem-solving skills, etc. Playing online games like poker develops reading skills among players. Poker requires us to read and understand all its concepts, instructions, and find clues. In fact, some people even read blogs and books on poker. The reading skills that are developed in a person benefits them when they read so many things, such as reading helps in the development of the brain. During the game, players come across situations where they have to think and act quickly in a certain manner. Thus, it develops problem-solving and critical thinking skills in a person, which are useful for the brain. Playing poker is a stress buster for many. So it helps in keeping the brain relaxed. Poker also enhances our ability to read situations, and opponents, as the players need to determine the odds and probabilities in any situation if it’s a flopping flush or a full house.

(The author is CEO & Co-founder, Pocket52) Moneycontrol Contributor
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Who is the richest person in poker?

1. Dan Bilzerian – $200 Million – Image: Instagram/danbilzerian Bilzerian is a huge Instagram star and claims that most of his fortune has come from poker winnings, won playing ultra-high-stakes poker games. Many are dubious of this claim though, as he received an unknown sum of money from a trust fund, plus has many business ventures, as well as a highly lucrative social media presence.

1. Bilzerian has made some big claims about his poker playing abilities, including that he made $50 million from poker in 2014 alone.
2. He has never won a major tournament, instead claiming that his money comes from cash games only.
3. The social media sensation has also been arrested on various occasions,
4. Regardless of how he got his money though, he’s still the richest poker player in the world by far.

If you are interested in playing poker, check out our online poker guide, or our top poker freerolls,
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How can I avoid paying taxes on poker?

Cleyton Ewerton, Unsplash @cleytonewerton In gambling, there are winners and losers. But even the winners can be losers if they don’t pay their taxes! Any money you win while gambling or wagering is considered taxable income by the IRS as is the fair market value of any item you win.

This means there there is no way to avoid paying taxes on gambling winnings. Gambling income isn’t just card games and casinos; it also includes winnings from racetracks, game shows, lotteries, and possibly even bingo. Certain special rules apply to gambling income and there are strict record keeping requirements required by the IRS.

However, you may be able to deduct gambling losses. Your gambling income is generally reported on Form W-2G for Certain Gambling Winnings, The easiest and most accurate way to find out how to report your gambling winnings and losses is to start a free tax return on eFile.com,

• Based on your answers to several questions, the e-File app will select and prepare the tax forms necessary to report your gambling winnings and losses on your tax return.
• However, if you want to learn more about how your gambling income affects your taxes, read on.
• Your Tax Year 2022 Return is due April 18, 2023,

Prepare to prepare your tax return with this comprehensive checklist of tax-related steps to take or this list of forms or documents to collect. Estimate your 2022 Tax Return for free now and include your gambling income or losses.
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How much can you win in gambling without paying taxes?

Generally, if you receive $600 or more in gambling winnings, the payer is required to issue you a Form W-2G. If you have won more than $5,000, the payer may be required to withhold 28% of the proceeds for Federal income tax.
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Does the IRS audit gamblers?

Ever wonder why some tax returns are eyeballed by the Internal Revenue Service while most are ignored? Short on personnel and funding, the IRS audited only 0.70% of all individual tax returns in 2016. So the odds are pretty low that your return will be singled out for review.

1. And, of course, the only reason filers should worry about an audit is if they are fudging on their taxes.
2. That said, your chances of being audited or otherwise hearing from the IRS escalate depending on various factors, including your income level, the types of deductions or losses you claim, the business you’re engaged in, and whether you own foreign assets.

Math errors may draw IRS inquiry, but they’ll rarely lead to a full-blown exam. Although there’s no sure way to avoid an IRS audit, these 17 red flags could increase your chances of unwanted attention from the IRS.1. Making a Lot of Money- Although the overall individual audit rate is only about one in 143 returns, the odds increase dramatically as your income goes up.

• IRS statistics for 2016 show that people with an income of $200,000 or higher had an audit rate of 1.70%, or one out of every 59 returns.
• Report $1 million or more of income? There’s a one-in-17 chance your return will be audited.
• The audit rate drops significantly for filers making less than $200,000: Only 0.65% (one out of 154) of such returns were audited during 2016, and the vast majority of these exams were conducted by mail.

We’re not saying you should try to make less money — everyone wants to be a millionaire, Just understand that the more income shown on your return, the more likely it is that you’ll be hearing from the IRS.2. Failing to Report All Taxable Income- The IRS gets copies of all of the 1099s and W-2s you receive, so be sure you report all required income on your return.

IRS computers are pretty good at matching the numbers on the forms with the income shown on your return. A mismatch sends up a red flag and causes the IRS computers to spit out a bill. If you receive a 1099 showing income that isn’t yours or listing incorrect income, get the issuer to file a correct form with the IRS.3.

Taking Higher-Than-Average Deductions- If the deductions on your return are disproportionately large compared with your income, the IRS may pull your return for review. But if you have the proper documentation for your deduction, don’t be afraid to claim it,

There’s no reason to ever pay the IRS more tax than you actually owe.4. Running a Small Business- Schedule C is a treasure trove of tax deductions for self-employed people. But it’s also a gold mine for IRS agents, who know from experience that self-employed people sometimes claim excessive deductions and don’t report all of their income.

The IRS looks at both higher-grossing sole proprietorships and smaller ones. Special scrutiny is also given to cash-intensive businesses (taxis, car washes, bars, hair salons, restaurants and the like) as well as to small business owners who report a substantial net loss on Schedule C.

1. Other small businesses also face extra audit heat, as the IRS shifts its focus away from auditing regular corporations.
2. The agency thinks it can get more bang for its audit buck by examining S corporations, partnerships and limited liability companies.
3. So it’s spending more resources on training examiners about issues commonly encountered with pass-through firms.5.

Taking Large Charitable Deductions- We all know that charitable contributions are a great write-off and help you feel all warm and fuzzy inside. However, if your charitable deductions are disproportionately large compared with your income, it raises a red flag.

• That’s because the IRS knows what the average charitable donation is for folks at your income level,
• Also, if you don’t get an appraisal for donations of valuable property, or if you fail to file Form 8283 for noncash donations over $500, you become an even bigger audit target.
• And if you’ve donated a conservation or façade easement to a charity, chances are good that you’ll hear from the IRS.

Be sure to keep all of your supporting documents, including receipts for cash and property contributions made during the year.6. Claiming Rental Losses- Normally, the passive loss rules prevent the deduction of rental real estate losses. But there are two important exceptions.

• If you actively participate in the renting of your property, you can deduct up to $25,000 of loss against your other income.
• This $25,000 allowance phases out as adjusted gross income exceeds $100,000 and disappears entirely once your AGI reaches $150,000.
• A second exception applies to real estate professionals who spend more than 50% of their working hours and over 750 hours each year materially participating in real estate as developers, brokers, landlords or the like.

They can write off losses without limitation. The IRS actively scrutinizes rental real estate losses, especially those written off by taxpayers claiming to be real estate pros, It’s pulling returns of individuals who claim they are real estate professionals and whose W-2 forms or other non-real estate Schedule C businesses show lots of income.

• Agents are checking to see whether these filers worked the necessary hours, especially in cases of landlords whose day jobs are not in the real estate business.
• The IRS started its real estate professional audit project several years ago, and this successful program continues to bear fruit.7.
• Taking an Alimony Deduction- Alimony paid by cash or check is deductible by the payer and taxable to the recipient, provided certain requirements are met.

For instance, the payments must be made under a divorce or separate maintenance decree or written separation agreement. The document can’t say the payment isn’t alimony. And the payer’s liability for the payments must end when the former spouse dies. You’d be surprised how many divorce decrees run afoul of this rule.

1. Alimony doesn’t include child support or noncash property settlements.
2. The rules on deducting alimony are complicated, and the IRS knows that some filers who claim this write-off don’t satisfy the requirements,
3. It also wants to make sure that both the payer and the recipient properly reported alimony on their respective returns.

A mismatch in reporting by ex-spouses will almost certainly trigger an audit.8. Writing Off a Loss for a Hobby- You must report any income you earn from a hobby, and you can deduct expenses up to the level of that income. But the law bans writing off losses from a hobby.

To be eligible to deduct a loss, you must be running the activity in a business-like manner and have a reasonable expectation of making a profit, If your activity generates profit three out of every five years (or two out of seven years for horse breeding), the law presumes that you’re in business to make a profit, unless the IRS establishes otherwise.

Be sure to keep supporting documents for all expenses.9. Deducting Business Meals, Travel and Entertainment- Big deductions for meals, travel and entertainment are always ripe for audit, whether taken on Schedule C by business owners or on Schedule A by employees.

A large write-off will set off alarm bells, especially if the amount seems too high for the business or profession, Agents are on the lookout for personal meals or claims that don’t satisfy the strict substantiation rules. To qualify for meal or entertainment deductions, you must keep detailed records that document for each expense the amount, place, people attending, business purpose, and nature of the discussion or meeting.

Also, you must keep receipts for expenditures over $75 or for any expense for lodging while traveling away from home. Without proper documentation, your deduction is toast 10. Failing to Report a Foreign Bank Account- The IRS is intensely interested in people with money stashed outside the U.S., especially in countries with the reputation of being tax havens, and U.S.

• Authorities have had lots of success getting foreign banks to disclose account information.
• The IRS also uses voluntary compliance programs to encourage folks with undisclosed foreign accounts to come clean — in exchange for reduced penalties.
• The IRS has learned a lot from these amnesty programs and has been collecting a boatload of money (we’re talking billions of dollars).

It’s scrutinizing information from amnesty seekers and is targeting the banks they used to get names of even more U.S. owners of foreign accounts. Failure to report a foreign bank account can lead to severe penalties, Make sure that if you have any such accounts, you properly report them.

• This means electronically filing FinCEN Form 114 by April 15 to report foreign accounts that combined total more than $10,000 at any time during the previous year.
• And taxpayers with a lot more financial assets abroad may also have to attach IRS Form 8938 to their timely filed tax returns.11.
• Claiming 100% Business Use of a Vehicle- When you depreciate a car, you have to list on Form 4562 the percentage of its use during the year was for business.

Claiming 100% business use of an automobile is red meat for IRS agents, They know that it’s rare for someone to actually use a vehicle 100% of the time for business, especially if no other vehicle is available for personal use. The IRS also targets heavy SUVs and large trucks used for business, especially those bought late in the year.

That’s because these vehicles are eligible for favorable depreciation and expensing write-offs. Be sure you keep detailed mileage logs and precise calendar entries for the purpose of every road trip. Sloppy recordkeeping makes it easy for a revenue agent to disallow your deduction. As a reminder, if you use the IRS’s standard mileage rate, you can’t also claim actual expenses for maintenance, insurance and the like.

The IRS has seen such shenanigans and is on the lookout for more.12. Taking an Early Payout from an IRA or 401(k) Account- The IRS wants to be sure that owners of traditional IRAs and participants in 401(k)s and other workplace retirement plans are properly reporting and paying tax on distributions.

Special attention is being given to payouts before age 59½, which, unless an exception applies, are subject to a 10% penalty on top of the regular income tax. An IRS sampling found that nearly 40% of individuals scrutinized made errors on their income tax returns with respect to retirement payouts, with most of the mistakes coming from taxpayers who didn’t qualify for an exception to the 10% additional tax on early distributions.

So the IRS will be looking at this issue closely. The IRS has a chart listing withdrawals taken before the age of 59½ that escape the 10% penalty, such as payouts made to cover very large medical costs, total and permanent disability of the account owner, or a series of substantially equal payments that run for five years or until age 59½, whichever is later.13.

• Claiming Day- Trading Losses on Schedule C- People who trade in securities have significant tax advantages compared with investors.
• The expenses of traders are fully deductible and are reported on Schedule C (investors report their expenses as a miscellaneous itemized deduction on Schedule A, subject to an offset of 2% of adjusted gross income), and traders’ profits are exempt from self-employment tax.

Losses of traders who make a special section 475(f) election are fully deductible and are treated as ordinary losses that aren’t subject to the $3,000 cap on capital losses. And there are other tax benefits. But to qualify as a trader, you must buy and sell securities frequently and look to make money on short-term swings in prices.

And the trading activities must be continuous. This is different from an investor, who profits mainly on long-term appreciation and dividends. Investors hold their securities for longer periods and sell much less often than traders. The IRS knows that many filers who report trading losses or expenses on Schedule C are actually investors.

So it’s pulling returns and checking to see that the taxpayer meets all of the rules to qualify as a bona fide trader.14. Failing to Report Gambling Winnings or Claiming Big Gambling Losses- Whether you’re playing the slots or betting on the horses, one sure thing you can count on is that Uncle Sam wants his cut.

Recreational gamblers must report winnings as other income on the front page of the 1040 form. Professional gamblers show their winnings on Schedule C. Failure to report gambling winnings can draw IRS attention, especially if the casino or other venue reported the amounts on Form W-2G. Claiming large gambling losses can also be risky,

You can deduct these only to the extent that you report gambling winnings (and recreational gamblers must also itemize). But the costs of lodging, meals and other gambling-related expenses can only be written off by professional gamblers. The IRS is looking at returns of filers who report large miscellaneous deductions on Schedule A Line 28 from recreational gambling, but aren’t including the winnings in income.

1. Also, taxpayers who report large losses from their gambling-related activity on Schedule C get extra scrutiny from IRS examiners, who want to make sure these folks really are gaming for a living.15.
2. Claiming the Home Office Deduction- The IRS is drawn to returns that claim home office write-offs because it has historically found success knocking down the deduction.

Your audit risk increases if the deduction is taken on a return that reports a Schedule C loss and/or shows income from wages. If you qualify for these savings, you can deduct a percentage of your rent, real estate taxes, utilities, phone bills, insurance and other costs that are properly allocated to the home office.

That’s a great deal. Alternatively, you have a simplified option for claiming this deduction: The write-off can be based on a standard rate of $5 per square foot of space used for business, with a maximum deduction of $1,500. To take advantage of this tax benefit, you must use the space exclusively and regularly as your principal place of business.

That makes it difficult to successfully claim a guest bedroom or children’s playroom as a home office, even if you also use the space to do your work. “Exclusive use” means that a specific area of the home is used only for trade or business, not also for the family to watch TV at night.16.

1. Engaging in Currency Transactions- The IRS gets many reports of cash transactions in excess of $10,000 involving banks, casinos, car dealers and other businesses, plus suspicious-activity reports from banks and disclosures of foreign accounts.
2. So if you make large cash purchases or deposits, be prepared for IRS scrutiny,

Also, be aware that banks and other institutions file reports on suspicious activities that appear to avoid the currency transaction rules (such as a person depositing $9,500 in cash one day and an additional $9,500 in cash two days later).17. Claiming the Foreign Earned Income Exclusion- U.S.

1. Citizens who work overseas can exclude on 2016 returns up to $101,300 of their income earned abroad if they were bona fide residents of another country for the entire year or they were outside of the U.S.
2. For at least 330 complete days in a 12-month span.
3. Additionally, the taxpayer must have a tax home in the foreign country.

The tax break doesn’t apply to amounts paid by the U.S. or one of its agencies to its employees who work abroad. IRS agents actively sniff out people who are erroneously taking this break, and the issue keeps coming up in disputes before the Tax Court.

1. Among the areas of IRS focus: filers with minimal ties to the foreign country they work in and who keep an abode in the U.S.; flight attendants and pilots; and employees of U.S.
2. Government agencies who mistakenly claim the exclusion when they are working overseas.
3. Article was written by: Joy Taylor and published in Kiplinger on March 5, 2017.

Original article here
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Is online poker easier than live?

1. Live Games Tend to Be Much Softer at Comparable Stakes – If you’ve played NL200 or higher stakes online, or heard the stories about it, you’re probably aware these games are tough. Here you’ll find dedicated grinders who know the strategy and don’t make many mistakes.

Beating online cash games at these stakes requires a lot of work of the tables. Live games at the same or similar level, on the other hand, are a lot easier. “If you’re beating NL200 online, you’ll probably have no problems playing as high as NL1,000 in your local casino.” A decent NL10 online grinder will be a favorite in most NL200 live games.

Even if it seems strange at first glance, there’s a perfectly good explanation for it. Most casinos don’t spread anything below NL200 because it’s not financially feasible, so everyone who wants to play poker has to play these stakes or higher. Online, you can play as low as NL5 if you simply want to have some fun, and many recreational players choose this option.

Because of this, you won’t find many people just looking to blow off some steam in NL200 games online, while you can find plenty of such players in a live setting. Of course, it works both ways. A decent winner in their local 1/2 game sitting down at the same stakes online can be in for a rough ride. You’ll probably need to brush up on your strategy and adopt some new skills before you can become profitable in these games, and you’ll likely need to use tracking software so that you’re not at a disadvantage.

Therefore, when transitioning from one setting to another, be sure to choose an appropriate stake.
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Do you have to pay taxes on online poker winnings?

The following rules apply to casual gamblers who aren’t in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.
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How much does the average poker player make?

Poker Player Salary

	Annual Salary	Hourly Wage
Top Earners	$71,500	$34
75th Percentile	$49,500	$24
Average	$42,591	$20
25th Percentile	$25,500	$12

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