Only two things in life are certain - death and taxes; and if you live in the U.S, there's only one thing that's even more certain than these two - the IRS will collect. Do you owe these persistent little men in dark suits dues on the poker winnings you raked in, thanks to the practice you had placing free casino bets?

The Sum of All Dues

If you're an American citizen, yes. Your online poker winnings - proceeds from free poker bets excluded - are taxable. Worse, you cannot deduct your gambling losses from your gambling winnings and simply report the difference. Rather, you have to report the full amount of your wins as income. Your losses, on the other hand, can be claimed as itemized deduction. Also, the losses you claim should not exceed your winnings.

For example, suppose you played poker in June and, thanks to the practice you had placing free bets, won $500. Then, you play in July and lose $800. Your win, $500, forms part of your gross income. Should you want to itemize your deduction, you can claim only $500 of the $800 you actually lost. Sad? Yes, but you cannot do anything|there's nothing you can do about it unless you pay your taxes as a professional gambler.

Go Pro?

So, should you file taxes as a professional poker player? It depends. As a professional, you may claim your net win as business income, meaning you add up all your winnings and deduct all your losses first before declaring the difference to the IRS. Also, professional poker players may chalk up certain costs incurred during or prior to playing as business expense - plane tickets for offline players, for instance, or reliable high-speed Internet access at home for online players. The catch is that the IRS charges you 15% self-employment tax on profits. Additionally, they hold professional gamblers to a high standard. If you have not chalked up a single win in years, odds are, the IRS will not recognize you as a professional player.

Thirty, and No Joke

Of course, this does not mean all American players pay taxes on their winnings. Many simply "forget" their wins. Others take advantage of "backers," or people who stake players for all or part of their tournament profits, do their paperwork, and even pay their taxes. Where there's a will, there's a way, after all; and with a 30% tax on net profit, what poker player wouldn't want to have an abundance of will?