So, as of 3/4/08, any live tournament you win in excess of $5,000 will be reported to the IRS by the casino.
The IRS will know just how much a player who won more than $5,000 actually won and will demand the player pay taxes on the winnings of 25 percent. If a player refuses to give the casino his tax information, then the casino must take 28 percent of the winnings for taxes.
IRS also reminds tournament winners that, by law, they must report all of their winnings on their federal income tax returns — regardless of the amount or whether they receive a Form W-2G or other form. IRS notes that this requirement applies for 2007, that it applied for earlier years, and that it will continue to apply even with the new law.
Since you can deduct your ‘gambling loses’ up to your win amounts, you may want to start keeping track of all your receipts (and loses) if you don’t already. Hotels, food, cabs, all count toward gambling expenses.
I hate taxes, and will probably just pay someone in Haiti a few bucks to come up with a new identity. GG me.