Are you a professional poker player looking to reduce your taxable income? Well, you need to understand what can and cannot be deducted from your taxable income as this will help you to maximize your deductions and reduce taxable income. Tax deductions vary based on whether you are a professional poker player or non-professional player. If you are just a casual player, you can just write off losses while reporting your income on tax return. On the other hand, if you are a professional poker player, you cannot deduct losses as well as expenses such as travel, lodging, meals, etc.
Here is a breakdown of what can and cannot be written off in 2025.
Casual (Nonprofessional) Poker Players:
Reporting winnings: As a casual player, you must report all your poker winnings on your tax return, including cash prizes and non-cash prizes.
Deducting Losses: As a casual player, you can deduct poker losses only if you itemize your deductions on the IRS 1040 form, which is one of the official documents that the U.S. taxpayers use to file income tax returns.
Non-Deductible Expenses: Expenses such as travel, lodging, meals, or other costs associated are not deductible for casual poker players.
Professional Poker Players: What They Can Deduct
Reporting Winnings and Losses: As a professional poker player, make sure to treat all your poker activities as a business and report all your poker wins and losses to avoid troubles with the concerned tax authorities. This will allow you to determine the net poker winnings, net profits or losses.
Deductible Expenses: While casual players are allowed to deduct only losses, professional poker players can deduct losses and expenses related to their poker activities. These expenses may include:
Travel, Lodging And Meals During Tournaments
Costs incurred on flights, hotels, car rentals, and meals during poker tournaments are deductible. Meals are usually 50% deductible as per IRS rules and personal vacations alongside tournaments are not deductible.
Supplies And Equipment Essential for Poker Activities
Professional poker players can also deduct the costs incurred on supplies and equipment. These costs may include items such as computers, monitors, headphones, chairs, and other tools used for online play.
Besides, you can deduct costs of notebooks, whiteboards, accounting software, or any other item used for record-keeping. If you create poker content, you can deduct costs for playing and streaming equipment such as microphones, cameras, lighting, and streaming software subscriptions.
Home Office Expenses
If you have a space in your home exclusively used for poker-related activities such as playing, studying, coaching, content creation, you can deduct a percentage of rent/mortgage, utilities, and maintenance costs.
Internet Costs
If you are a person playing poker regularly, you can deduct the cost of your internet service as a business expense. You can even write off the full cost if you use internet services exclusively for poker games.
Tax Advice & Clerical Expenses
If you hire a tax professional specializing in gambling or poker taxation, it is a business expense. Fees you pay for tax preparation, accounting, or some legal advice related to your poker winnings are deductible.
Education And Training
Expenses on resources aimed at improving gambling skills are deductible. This means that the costs for poker coaching, training sites, tracking software, and solvers are deductible. Similarly, subscriptions to various poker -related publications, such as strategy magazines, news sites, or online membership sites providing poker analysis, club membership fees, can be deductible as educational and business-related expenses.
Wages Paid To Employees for Their Assistance
If you hire someone to help manage your poker career—such as an assistant, social media manager, or even a bookkeeper for bookkeeping —the wages you pay are deductible as a business expense. Make sure that payments are properly documented and reported for tax purposes.
Tournament Fees(Entries or Re-Entries) And Rake
Professional poker players can deduct tournament fees and rake they pay. Fees for live events or online events and even the rake you pay are considered deducible expenses. Assume that you enter a tournament for $50,000 and re-enter it after you bust, you end up paying $100K, an expense which you can deduct. Similarly, you win $50,000 but pay $10,000 in rake. The actual amount you have won is $60,000 before rake. So, change the profit amount to $60,000 while filing deductions.
For more insights on tax strategies, you may find this video informative.
Disclaimer
The information in this article is meant solely for information and should not be considered as professional tax help. There are different tax rules in different countries and what works in India may not work in the US.
Given the complexities and potential chances in tax laws in recent times, you are advised to consult an experienced tax professional to ensure tax compliance and better understand what can and cannot be deducted. Keep following PokerProNews for more such informative pieces on deductible expenses from your taxable income.
