Poker Question, need advice and some help with winnings/tax/ etc./ ?

Question

If you win a tournament ONLINE and lets say you win 1 million dollars. This Online site is an American one. so therefore when you cash out you cash to Australian dollars. This winning must you pay tax on? the other question is after this win, should you win another tournament, should you be classified as a poker pro? and if that is the case the next tournament you win, you will pay the higher tax? bear in mind 2nd tournament was in Australia, and you won 1 million dollars at your local casino. Any advice?

Answer 1

Well if this really happened to you then congrats.  If you win money at a casino in the U.S. they will tax you regardless of whether you're American or not.  When you get back home you can apply to get this back from Uncle Sam.  Depending on the tax situation where you live you may or may not have to pay tax in your own country.

In terms of being classified as a "pro," this generally is based upon whether you derive most of your income from it and if you do then you're considered a pro.  If you have a regular job then you're not a pro.

King Cobra Poker

http://kingcobrapoker.com

Answer 2

Although it is not illegal for Americans to play at offshore poker sites, it IS illegal to own and operate an online casino/poker site from American soil.  So, you being from Australia, I would be wary of ANY site that is operated in America!  I'd doubt you'd face prosecution, but you should be advised to protect your money and get it out of there!

But, to answer your question in a different light, you are responsible for reporting and paying taxes, depending on Oz law.  Foreign poker sites have NO responsibility to report your winnings to your country's revenue department, but your bank may or may not report the large deposit to your country's revenue department.  

For more poker tips, check http://poker-lobby.com Hope this helps.