Although an entertainment form first and foremost, gambling activities can provide players with a windfall of cash if they are successful. Of course, winning isn’t something that can be guaranteed and only a few people have been able to turn their passion for casino games into a profession.
Nonetheless, it’s always nice to be on the end of a win when playing a game of chance. However, from a legal standpoint, this has become an area of confusion for many in Australia, as there are guidelines regarding the income that has been obtained when playing at an online casino.
While most players will only ever consider what the best casino bonuses in Australia are or what games they can play, most won’t ever really think about what they have to do if they are among the very few who are able to land a win and walk away with a sizable profit from their entertainment session.
Whether a professional or a casual player, there are different rules that need to be adhered to. As a result, here are some of the best tips to follow that can help you to remain on the right side of the law, and potentially enhance any gaming experience that may be obtained in the future, especially after finding the sites with the best bonuses that offer value for money!
Professional players need to consider so much more than casual players
Australians who are able to become a professional gambler and play the games that they are passionate about as a means of trying to earn a living will need to be more aware of the laws the country has than those who are casual players. A casual player is an individual who plays for entertainment purposes and doesn’t rely on any income from the games that they play for living expenses.
Those who are professional are required to declare the earnings that they have made. The Australian courts will usually take into account the three following aspects as they follow the Taxation Ruling IT2655 – Income tax: betting and gambling guidelines that have been set out:
- Is the activity completed as if it were business?
- Does the individual have specialist knowledge in relation to the gambling activity?
- What is the size and scale of the operations?
If the courts decide the player fulfills its criteria, then tax will need to be paid on the winnings that are recorded over the financial year.
How do you keep track of and handle taxable winnings from gambling activities?
If you fall into the category of being classified as a professional gambler, then you will need to ensure that you can make accurate and timely tax returns based on the winnings that are obtained. This can be a difficult challenge, but it’s one that is easily accomplished.
Indeed, the individual needs to be meticulous in their approach and everything they do. They need to be on top of every detail, never letting their attention slide. This includes being familiar with the laws that exist, how they can impact them in any potential way, and what they need to do to ensure they remain on the right side of it.
The best way to remain on top of everything would be to keep meticulous records of their profit and losses. Players should know exactly what they win and what they spend when playing, as this can give them a better idea of what they owe in terms of tax. This will help them complete their tax returns accurately while also potentially making things more timely, as returns can be extremely difficult to complete due to the amount of information that is needed.
Alternatively, an accountant or tax attorney could also be considered. There are accountants available that are specifically trained to deal with professionals in the gambling industry. They will have all of the knowledge about how the law works and what needs to be done to ensure an efficient process is completed. Indeed, seeking professional guidance can help mitigate risks and ensure compliance with regulatory requirements.
Final Words
Remember, paying tax in Australia on gambling earnings can all come down to the type of player you are. If you are a casual gambler and one that doesn’t rely on the earnings that are made, then it’s not considered a taxable asset as it’s not considered assessable.
However, if you are a professional and fulfill the three criteria outlined by the courts, you will need to have all of your records in order. Be as meticulous as possible with them, and keep data on all your finances to ensure you streamline the process and make it as easy as possible. Alternatively, consider an accountant, as these can help you navigate this incredibly challenging terrain successfully and correctly.
