<p>Hi I am French and American, currently studying in France and going to Stanford next fall for a master’s degree.
I plan on paying my tuition with online poker earnings (I know this is going to eem crazy to most if not all people but please don’t be worried about that).</p>
<p>In France I didn’t need to pay any taxes on these earnings, but is it the same in America ?</p>
<p>Thank you for your help.</p>
<p>I am not a tax expert, but a simple google search ([Reporting</a> gambling winnings, deducting losses on your tax return](<a href=“Bankrate: Guiding you through life's financial journey”>Taxes On Gambling Winnings In Sports)) shows that in the US, you do have to pay taxes on your winnings.</p>
<p>I am not sure what role citizenship plays in that, though – are you an American citizen?</p>
<p>you must be crazy good at poker…</p>
<p>Hey man, I am having the same problem, but with sport betting. The stupid thing is that you have to pay taxes only when you win and nobody takes into account your losses.
Online poker is good business, but it really takes too much time (and more money to play with). However, my congratulations.<br>
Btw, I’m not American and I do not bet in American sites and I don’t see the point in paying taxes in the US.</p>
<p>I am not a lawyer, an accountant, a tax accountant or in any way professionally qualified to provide this information, but this is my understanding of the tax law regarding US citizens (or dual citizens) living overseas:</p>
<p>US citizens are required to file income tax returns whether they live stateside or overseas. the same rules regarding minimum income, etc. apply. However, when living and earning income overseas, a sizable deduction applies (I’m fuzzy on the details of this deduction.)</p>
<p>So if I understand your situation correctly, you should be declaring your gambling income to the IRS even now, and may end up actually paying taxes on your earnings if you legally reside in the US. As to where your legal residence is while going to college in the US, that is an issue that you could look into, but don’t just assume that because you go to school in the US you are automatically a resident, e.g. if you are a dependent and your parents live overseas you may be able to claim foreign residency. I’m not sure if that would help you with your tax situation, though.</p>
<p>I also believe gambling losses are a legal tax deduction. Keep good records.</p>
<p>He said he’s not a US citizen.</p>
<p>The issue is, does a non-US citizen attending university in the US have to pay US income tax on earnings generated on a computer located in the US interacting with a computer outside the US? </p>
<p>Does not matter that it is gambling, I believe, though I do not know for sure.</p>
<p>Thanks for all the answers. And just to clarify, I am an American citizen.</p>
<p>Generally, even non-US citizens pay taxes on funds earned on the US. I’m sure they’re a lot of exceptions though.</p>
<p>Whereas most countries use residence as the primary determinant of tax liability, the US uses citizenship as a primary factor. A substantial portion of salary income earned overseas by dual citizens is deductible for US income tax purposes (though filing a return is still frequently necessary), but I don’t believe unearned income from overseas sources gets the same shield.</p>
<p>Long story short - you quite possibly should have been filing US income tax returns the entire time indicating your gambling earnings as well as any other reportable income. Whether you would have had any tax liability would depend on the specifics of the income classifications and amounts.</p>
<p>You should see an accountant to establish appropriate filing needs. This will settle (quite a bit better than an internet message board) whether you will need to file a return on future “US based” gambling income, to what extent you will have tax liability, and to what extent you are liable for unpaid taxes on and penalties for non-reporting of prior income.</p>
<p>Let me agree with PABitz. U.S. citizens have to file income tax returns if their income exceeds the sum of the standard deduction and personal exemption amount regardless of where they live. That doesn’t necessarily mean that they will owe any tax, but they are required to file the return. If I were you, I would find myself a qualified accountant and deal with this as soon as you can. Back taxes with interest and penalties are no joking matter.</p>
<p>I think you can’t report losses on stocks. Like instead of capital gains you can report capital losses. Maybe there is some way to report a loss from gambling.</p>
<p>Here you go
[Tax</a> Topics - Topic 419 Gambling Income and Expenses](<a href=“http://www.irs.gov/taxtopics/tc419.html]Tax”>http://www.irs.gov/taxtopics/tc419.html)</p>
<p>The only way to report gambling losses is to take the loss up to the amount of gains, but only as an itemized deduction on schedule A.</p>