The first few years I played poker for a living, I overpaid drastically on my taxes, didn’t keep great records of my income in different games, and probably cost myself tens of thousands of dollars with silly mistakes in running my business. If you are serious about poker, then you have to be serious about running your business.
I frequently get students who tell me how badly they want to play poker for a living. They usually just think they want it, and when it comes to putting in the work that is actually required, they lose interest quickly. But if you really want to be a successful poker pro, then you need to be your own accountant or hire a good one and be your own manager who keeps very good records to send to that accountant.
If you don’t do this, if you don’t keep good records and do smart things with your money, you will not make it as a poker pro. You will end up owing too much money in taxes, it will crush your bankroll, and you will have no idea how much money you are making in any of the games you play.
Mortgage issues and documenting expenses
I just went through the process of buying a house here in Las Vegas, and without a job other than poker to report to lending institutions, it can be really tough. I managed to get a mortgage, but it wasn’t easy. Even though my credit was very good, and my income was more than high enough to afford the home I wanted, getting a mortgage was more difficult than you’d think.
In order to get a conventional mortgage at the same interest rate as someone with a typical job, I had to pay extra taxes that I didn’t owe just to bump up my taxable income for the year.
I was lucky. I had a great accountant who specializes in taxes for poker players. I can’t recommend Kondler CPA high enough. They are based in Las Vegas and they all play poker as well as being tax experts.
READ MORE: Interview with Poker Tax Specialist Ray Kondler
I also had a great mortgage broker. I went to six or seven mortgage companies who either told me they couldn’t help me at all, or offered me a bank statement mortgage at 1.5% above the standard interest rate at the time. With 757 credit, I still couldn’t get a mortgage at a reasonable rate until I found Jenny Cox at Guild Mortgage. Thanks Jenny! If you need a mortgage, and have a unique job, definitely get in contact with Jenny.
Being a poker pro means that poker is how you make a living (for tax purposes). It doesn’t refer just to how good you are, or how much you have won, or how many hours you put in. It’s about the bottom line. And it’s tough to beat the game enough to beat the rake and pay your bills with what is left after the mortgage takes a piece and the tax man takes another. So you have to pay close attention to that bottom line.
That means you must be proactive and aggressive in controlling your expenses, saving your money so that you don’t have to have a backer any longer than necessary if you must take one, and making good choices with your money overall. If you are gambling, betting sports, spending money playing dice, drinking, and eating out every day, you are going to need to make a hell of a lot of money. Until you know that you are making $200,000 a year, you really need to leave those things alone or you will end up broke.
Are you willing to put in the work?
Do you want it bad enough to quit gambling and betting sports with your bankroll? Are you willing to forego that “bucket list” trip to Australia to play poker at the Aussie Millions until you’re properly bankrolled to fund such an excursion? Do you want it bad enough to study your ass off for months to make sure that your game is perfect – and to keep on studying, lest the competition get better than you? Are you prepared to adjust your schedule accordingly enough to play in a room that you don’t like, simply because your hourly win-rate is better there? Do you have what it takes to move down in stakes when necessary? Do you want it bad enough to do the hard parts?
Or do you just really want to play a lot of poker?
Do. The. Work.
— Cody Rhodes (@CodyRhodes) November 21, 2018
If you aren’t going to keep records and take care of your taxes properly, realistically speaking you don’t have a chance of maintaining that poker lifestyle you strive for. You aren’t a boxer or a golfer where someone is going to come along and be your manager and take care of all that stuff for you, even if you’re a great player. You have to do it yourself. Being your own manager is a big part of your job as a poker pro. And it’s a hassle. So the question is…
Do you want it bad enough?
If you do, then you need to keep perfect records. You need to know what your hourly rate is in each game and each poker room. I can guarantee that this will significantly increase your income if you move around a lot. When I first started tracking my statistics online many years ago, I discovered that I was making twice as much money per hour playing sit and go tournaments as I was playing cash games. Switching to 100% sit and go play gave me a 40% boost in my income immediately and that was a big enough raise for me to quit my job.
Of course, you also need to pay your taxes and do your own bookkeeping. If you aren’t going to hire an poker tax specialist like I did, then you need to learn to be your own accountant. I recommend buying QuickBooks and spending a few hours on YouTube learning exactly how to use it. Then you will have something concrete to send to your accountant when tax season rolls around. Make sure your accountant is very familiar with gambling and poker because there are a lot of unique write-offs that can save you thousands, and a typical “tax guy” won’t know about them.
May need to start filing as a “pro” poker player for tax deductions. I ALWAYS owe! Who here can give me the pros and cons? #pokerhelp
— Rob Palacios (@DaRealKCPenny) April 20, 2017
You also need to be your own advisor. One of the things a manager does is help you keep your game in good shape and make sure you are doing the right things to be prepared to play well. You won’t have someone yelling at you to go bed, stop drinking so much while you play, or stay in good shape so that you can hold up during marathon tournament sessions. You have to do that yourself. And this is a spot where many players fail. You have to hold the reigns yourself and keep your bad habits in check while surrounded by vice.
You also have to be good enough to win. Which means that you have to be your own poker coach, too. Starting to sound like a lot of work? It is. Being your own coach means that you will have to study on your own. Reading books, enrolling in poker training courses, or paying for an actual coach may all be necessary. If you are keeping accurate records you will know what your win rate is and should be able to tell how much help you need. If you need it and don’t go out and get it, your coach (you) is failing to do their job, and you will fail. You need to be a very demanding coach to get good enough to make a living playing poker professionally.
So if you want it bad enough and envision yourself as a pro player, you need to wear many hats: you have to become a bookkeeper, a manager, a coach, and of course a good player.