2024 WSOP!

I think in theory this is true. However, the WSOP is a different beast given the field sizes. The purpose of paying more than 10% is to increase the ROI on time for players. IMO it should basically be a staple that multi-day events get in the money in one day except in very rare circumstances (the ME for example). Who the heck wants to play multiple days, including having to incur the travel costs to do so, in order to not make any money? So for typical field sizes, 12.5% probably does the trick. I think for most WSOP events, it would not. But of course, they can certainly tinker with their payouts any way they want.

I think that is definitely a per venue thing. In any case, if a person is reasonably good with money, then withholding is almost always disadvantageous, depending on the calendar date the win occurs on.

The link you provided uses the word “must” and “may” in different sections, neither of which directly indicate they are applicable to poker tournaments. It does not surprise me the IRS language is vague and up for interpretation. This is why we have tax courts and why the majority of people who don’t have access to good accountants are at a distinct disadvantage.

In any case, 300x, if that is a real threshold, is not one which the vast majority of WSOP winners will reach. So I think the actual WSOP policy remains a bit of a mystery. Wouldn’t it be nice if they just posted if so it were clear to all?

I dunno if that IRS regulation is new or not, but I had tourney wins of over 300x the buyin in 2011 and 2014 and didn't have withholding.

There is a section for poker tournaments. What was previously copied in this thread isnt for poker tournaments.

Its pretty clear actually. No withholding as a US taxpayer if you provide your TIN(SSN)

4. Poker Tournaments
File Form W-2G for each person to whom you pay more than $5,000 in winnings, reduced by the amount of the wager or buy-in, from each poker tournament you have sponsored. Winnings and losses of the participant from other poker tournaments you have sponsored during the year aren't taken into account in arriving at the $5,000 amount.

Withholding and backup withholding. If you file Form W-2G for the person to whom you pay more than $5,000 in net winnings from a poker tournament, and provide a copy of Form W-2G to such person, regular gambling withholding doesn't apply to the winnings. However, if the person who wins more than $5,000 doesn't provide a TIN, you must apply backup withholding to the full amount of the winnings from the tournament at the backup withholding rate of 24%. Net winnings of $5,000 or less aren't subject to reporting, withholding, or backup withholding.

I have never had any Federal taxes withheld in over 30 years of playing tournaments. Including the 500x return I got in 2004. I have been asked many times if I would like to have anything withheld (and always said no). I have had taxes withheld for the state I was in a few times, but never Federal taxes. This would have been very different if I were a citizen/resident of another country.

Aka - You have been very helpful to readers on many issues, you have experience and are willing share that in many cases for the benefit of others.

HOWEVER you also don't know when to just say I AM WRONG or I didn't know that. You are entitled to your OPINION and typically you support that opinion with a well written argument. FINE good for you.

Tax withholding regulations are not OPINIONS, Venues don't get to pick and choose what they follow if they are following the law. Regulations change over time and what may be true 5 years ago are NOT necessarily accurate today. The WSOP policy is not a "mystery" and while CAESARS has on EXCEEDINGLY RARE occasions chosen to interpret the IRS code slightly differently (backers income reporting is a specific example in the past) the regulations for withholding are very clear and also very specific to the type of wager that generated the payout.

The Link is absolutely specific to poker and other gaming winnings as to what the current IRS Treasury regulations require. So for the benefit of those that read and pay attention to your posts please stop the obfuscation.

NOTE: To be perfectly clear I am NOT disputing Greg Raymer and his personal experience. I suspect but DO NOT KNOW that the 300X criteria became part of the regulations well after his ME victory. Greg in his prior lifetime was an attorney (patent I believe) and can read a legal document and the tax law and has enough real world experience on cashing and W2G's to be someone to pay attention to.

I've never had them withhold, that being said it very important and I stress, VERY important, to keep track of every penny you spend related to your stay and travel to and from Vegas and that includes your meals (even the $30 hotdog). I even log my mileage for the drive to the airport, Uber trip ect, all of that goes toward reducing your taxable income, ie your tax the gov will collect.
I've seen people toss their tourney slips for events they bust....save them all they count against your taxable income.

Tourney slips count as gambling losses, but your travel expenses and meals are not deductible unless you file as a professional gambler.

It says it right on the structure sheet, right under the $3,000,000 guaranteed Prize Pool, "Payouts Start on Day 1s".

Yes, and gambling losses up to a maximum of your reportable gambling wins are deductible only as a non professional if you ITEMIZE. Current tax law basically financially screws you if you take a standard deduction.

Let's all hope after the WSOP these are all relevant topics for everyone for our tax return filings for next year. As noted by above accurate detailed contemporaneous supported by receipts records are key to winning any tax dispute with the IRS.

Bad news, friend. Food is ridiculously expensive everywhere in Vegas. From the smallest shops to the swankiest restaurants, they absolutely gouge visitors on food. It should honestly be illegal to cram that many human beings into a space as big as the Las Vegas Strip and not provide ample, reasonably priced food options. Granted, there are a couple of fast food joints, but they aren't close to the Horseshoe.

If you decide to eat out every meal, I would expect to spend at least $50-60 per day. That is not a typo. That is $50-60 every day.

The only realistic option you have (unless you want to walk 1.25 miles down the strip to the cheapest fast food joint) is the grocery store. Get an Uber and go to the grocery store. Stock up on as many snacks and non-perishable foods as you can. You might request a refrigerator from the hotel desk, and be sure to specify your medical issues.

Isn't it also true that unless you have enough other deductions (mortgage interest, state taxes, medical costs) that the standard makes more sense? In many cases, gambling deductions alone may not be enough. The population of those that can itemize seems to shrink each year.

Short answer is, yes you are absolutely correct.

The cap on the amount of state based taxes applicable for itemization coupled with the increase in the allowed standard deduction significantly increased the % of tax payers for which itemization does not make sense.

Knowing that you are a CPA Mr. McCoy.

I have an unrelated question.

If someone claims bounty of 10k in Million $ bounty. If he had fired 3 bullets for the tournament. How would be his gain calculated for tax purposes.
$10000 bounty- $3000 buy-ins.
Or
$10000 bounty is fully taxable?

I’m not really sure what I’m supposed to be obfuscating. The link you provided had sections which seemed to be at odds with each other, which is nothing surprising for IRS statutes. And until dimeat’s contribution, I didn’t see anything specific to poker tournaments.

The only thing I am claiming is, in my experience outside the WSOP, withholding has been a player choice for US taxpayers. And I expect it is so at the WSOP as well, but I don’t know for sure. If their policy is so clear then again, it would be nice if they just spelled it out somewhere so we wouldn’t have to speculate, not necessarily about the law, but in regard to what the WSOP does with it.

At the risk of stepping on any CPA toes, I’m pretty sure the first part of this is not at all true unless a player is designated as a professional gambler by the IRS. And that designation isn’t so easy to get unless a person can show that their main source of income and occupation is gambling. Travel and other peripheral costs cannot be deducted except as business expenses of a person who’s business is gambling.

Of course, people should keep their buy in slips so they can write those off as losses against total winnings on their federal return (if they itemize). They can also do that in some, but not all states.

As Stated before I am NOT A PRACTICING TAX CPA even my answers are worth exactly what you are paying for them 😃

The Casino MAY issue you two W2G'S
Tournament payout (if it exceeds the $5,000 net win threshold)
and
Bounty payout W2G and that would list
REPORTABLE WINNINGS (box 1) AS $9,000 because that is the transaction associated with the winning $1,000 bullet. I THINK that each bullet and the results from that entry would be treated as separate events for tax reporting purposes.

The Casino might also COMBINE the bounty and the Prize pool win in the reporting on a single W2G. It's an interesting question and a good question to send directly to WSOPFAQ for a definitive answer.

The tricky part is say a $3500 tourney cash (taxable but NOT reportable ) with a $10,000 bounty the NET win is clearly $12,500 but it is entirely possible they could REPORT ANY of the following
W2G BOX 1 $10,000 Bounty Win amount only with no entry offset
W2G BOX 1 $ 9,000 Bounty win amount with cost of entry offset
W2G BOX 1 $12,500 Bounty and prize pool win with cost of entry offset

Realize that what is being REPORTED is not what is necessarily TAXABLE by law................ and also why I repeatedly say I am NOT a tax CPA LOL.

Side note upon doing some specific research on the 300 x rule and REQUIRED withholding there may be an exception for poker tournaments.
This has nothing to do with the taxability only if a 24% Withholding is ever a requirement for a person with a valid Tax ID number.

OMG it will be a very complicated situation as for base cost will be different for each players as this is rebuy tournament.

As bounty starts in day 2 , some lucky players with just shooting single bullet and many with multiple bullets with multiple day 1 entries and re-entrees.

As WSOP requires you to have a player’s card , they have records of cost of each players.

And I would like to believe that they will add and combine total rebuys as total cost
for each players.

For tournaments taxable amount:
Winning- cost of tournaments( buy-ins)= taxable or non taxable amount to IRS.

In bounty tournaments it should be:
Winning Amount ( bounty/ bounties + cashed amount-buying ( all the bullets) = net winnings for tax purposes.

I would be very surprised if they did this. You can certainly deduct multiple entries from your overall wins for the year, but I doubt the casino will do that for you in a single tournament on the form. Each entry is considered a separate wager. TBH, this is probably how players should view it too, though it’s easy not to.

In a similar vein, I always find it annoying that they don’t include tip in the cost. If a player is leaving hundreds or even thousands of dollars in tip, it’s pretty unfair that they are being taxed on profit they never made. I suppose this goes back to the whole inability to deduct expenses for non professionals. Still, it hurts the players. It hurts the dealers. The only thing it benefits is Uncle Sam, which I suppose is the way it is with lots of tax laws.

As for bounties, it would not be at all surprising to me if those are treated a little differently from regular tournament winnings for tax purposes. More like a jackpot or something like that. In that case, I would think they will only issue w-2s for $5k bounties and above, and may even issue one for each rather than a sum total. Last year I won a table game bet which laid 500-1 on $10. They issued a w-2 for that single bet, even though it was not > $5000 because it was considered a jackpot.

Anyhow, as RealMcCoy mentioned, the only folks who can properly answer these questions, in theory, are the WSOP. It would just be really nice if they created a FAQ which detailed all of the tax treatments for their events. I don’t believe regulations change all that often, so it’s not like they would have to constantly update the FAQ. And they are dealing with folks from all over the world, and with amounts that often eclipse reportable levels. Just tell us in detail what to expect from the WSOP then people can seek more expert advice on how to best handle specific situations.

I understand you being issued a w-2 g for winning a Royal Flush or something.
But you had extra separate bet of $10 for a Progressive Jackpot.

But for bounty we are placing any extra bet . That’s the part of our buy-ins.
All the bounty tournament clearly says that certain % of buy-ins goes towards Bounties.

The open road beckons.

This is a view along rt 93 from the Phoenix area to Las Vegas. I'll be seeing this in 8 days.

I believe the issue you run into is cash payouts can be claimed at any point during the series and I don’t believe it has to be at the same time as collecting bounty payouts. Those cannot even be redeemed till the afternoon of day 2, which is hours after regular payouts are available.

So I believe it’s reasonable to assume you will get different w-2s for applicable bounties vs applicable regular cash payouts. Since everyone who is eligible for a bounty has already cashed, they will apply your buy-in against the cash amount, and zero against the bounty. At least this would make sense to me. what they actually do is still up for debate.

Payouts were made on all the day 1s. 1006 advanced to day 2 and got $2,000 as a day 2 min-cash. 1007th did get paid and was omitted by oversight but is listed if you click on "results" for that event instead of "payouts". Players could cash multiple times and still not make it to day 2 and thus fail to be in the top 1006. Player 1008th (really is 1007th when you look at "results" page) cashed several times on the four day 1s for a total of $5060 so he is listed as finishing 1008th since he won the most money of anyone who did not make it to day 2. Only about 5% made it to day 2. https://www.wsop.com/tournaments/results...

Thanks for explaining this mystery, RedOak!

I'm guessing they pay a certain % of each Day 1's field, perhaps making some minor adjustments on the last Day 1 and/or letting the total payouts be off by a little (which I'm pretty sure is true).

Would have been a lot less confusing if the Prize Pool tab showed the original planned payouts with a note that players could cash multiple times. Below $2,000, it really did just drop slowly to a min cash of $1,061; also, about 15% of the field did get paid except that multiple prizes to the same people dropped it to 13.8%.

Yeah, top 15% get paid, so if say Day 1B they have 2,000 entries that flight, they know they will pay top 300 for that flight. There will be a money bubble on Day 1B to get to top 300. But then tourney continues through how many ever levels they said would be played that day.
Last year was my first time at the WSOP, played 2 events, Cashed/made Day 2 on one event. Cash bubble for the day burst around 10:45pm, but the flight didn't bag until a little after midnight. Plenty of people cashed the flight but didn't make Day2.