IRS suggests dropping casino winnings threshold to $600
Quote: NostronNeed to adjust and raise for inflation - not lower. IRS has more important things they need to be focusing on.
Feds need to squeeze every last nickel from the system.
Quote: bigfoot66It is penny wise and pound foolish. They will make much more money from allowing the machines to keep going instead of locking up so that the house can generate more money from the machines for the government to steal.
As a gambler I wish they would raise the limit but realistically lowering the limit will force more people to report the winnings they should be claiming now but are not.
If the IRS could have their way they would make it such that you can not play a machine without a players card and that every dollar of coin in and coin out would be reported automatically. Sadly, the technology exists if they ever decide to go in this direction.
Most of the money in play at a casino has already been the subject of taxes when it was earned. Individuals are not in business when they are gambling, and thus should not be paying taxes on any money. The casino, on the other hand, is running a business, and therefore should pay taxes on any net revenues.
Quote: RaleighCrapsBut this also assumes that everyone winning $600 is ahead, and we all know that is not reality.
No that is absolutely incorrect. A W2G says that you had a win of that amount not that you are ahead that amount. It is up to the taxpayer to show whether it has tax implications to them. People seem to forget that after every single day that you are up one cent gambling you are required to report that. Granted nobody does, but they are definitely supposed to.
Quote: DRich
If the IRS could have their way they would make it such that you can not play a machine without a players card and that every dollar of coin in and coin out would be reported automatically. Sadly, the technology exists if they ever decide to go in this direction.
How much revenue would be lost by losing unrated players? And how much tax revenue would be lost by doing away with false positive W2Gs (which would be good for us but bad for them)?
Quote: DeucekiesHow much revenue would be lost by losing unrated players? And how much tax revenue would be lost by doing away with false positive W2Gs (which would be good for us but bad for them)?
It would definitely reduce the handle some but the truth is that most players would still gamble. I believe it was Missouri that used to require all players to be tracked because they had a limit of how much you could lose per day. You couldn't play without the card and once you lost the amount mandated by the state you could no longer play that day.
Quote: DRichIRS suggests dropping casino winnings threshold to $600'''
Link
This would make higher-limit slot playing almost unplayable and would deter such play. It's hard to imagine the casino lobby would somehow allow this to happen...
Quote: TheBigPaybakQuote: DRichIRS suggests dropping casino winnings threshold to $600'''
Link
This would make higher-limit slot playing almost unplayable and would deter such play. It's hard to imagine the casino lobby would somehow allow this to happen...
The casino lobby will fight this hard and hopefully prevail.
The way most places currently handle high limit slots is to have reps in the high limit area writing down on a piece of paper each hit of $1200 or more. At the end of the day they total them up and issue the W2G's. It does require the rep to turn a key on the machine after each $1200 hit.
Basically, when I pull a slot machine, before it stops and I win anything, I've already lost money... Every pull you lose money. The fact that a jackpot appeared means nothing as it will all go back and more if you keep pulling.
Quote: RomesIt should be illegal to tax any winnings... Even a player who wins a "$10,000 jackpot" really just earned a negative expected value. Everyone who plays any casino games without an 'edge' ends up at the same negative expectation given enough time.
Basically, when I pull a slot machine, before it stops and I win anything, I've already lost money... Every pull you lose money. The fact that a jackpot appeared means nothing as it will all go back and more if you keep pulling.
As utopian and wonderful as that sounds, it just doesn't work that way in this country. Income is income, no matter how likely, and the government is not going to ease up on getting a piece of the action. If anything, they're goin to get more relentless, and they've got the law on their side.
Quote: Deucekies...Income is income...
That's my point. I can mathematically prove it's not income.
Ploppy slot players lose all their money back to the casino anyway, so who cares if they get hit with an unnecessary tax burden.
Example avrage joe plays all year and normally loses but dosent really add all that up.
now at the end of the year he hits a big jackpot he's happy and just pays the taxes.
A forced tracking system would wize them up.
Some places don't even have to key it. At least in the past this was the case. They just set the JP lock out threshold higher.Quote: DRichQuote: TheBigPaybakQuote: DRichIRS suggests dropping casino winnings threshold to $600'''
Link
This would make higher-limit slot playing almost unplayable and would deter such play. It's hard to imagine the casino lobby would somehow allow this to happen...
The casino lobby will fight this hard and hopefully prevail.
The way most places currently handle high limit slots is to have reps in the high limit area writing down on a piece of paper each hit of $1200 or more. At the end of the day they total them up and issue the W2G's. It does require the rep to turn a key on the machine after each $1200 hit.
Quote: AxelWolfIs is possible the IRS would lose money if they tracked all coin in and out since most people who hit jackpots just pay the taxes on that and don't really keep track of daily wins and loses.
Example avrage joe plays all year and normally loses but dosent really add all that up.
now at the end of the year he hits a big jackpot he's happy and just pays the taxes.
A forced tracking system would wize them up.
No the IRS could make big money because the amount of standard deduction would now be taxed. You have $60k in income, and you win $15k in small daily wins and lose $20k in small daily losses. On your taxes your income is now $75k and then minus the $15k in losses on Schedule A and net income for taxes is $60k. Currently it would be $60k income and minus standard deduction of $6.2k or $12.4k or net income for taxes of $53.8k or $47.6k. This is just a very simplified example, but the IRS would come out ahead.
Also if the IRS got real aggressive they could start taxing table game winners, by requiring ID for all cash/chip transactions.
I have always felt it was a ridiculous assumption that gamblers were as a whole a money earning group of people who were avoiding taxes on income.
That there are certain gamblers: poker players, insiders in horse racing, card-counting blackjack players, and the like who do indeed avoid income taxes cannot be doubted. But the idea that the Feds can avoid missing out on that particular tax income by getting into the pockets of daily winners in slot play has been absurd all along.
IMO the tax code having even a yearly winner paying income, without allowing taking losses in years that that occurs, is also highway robbery and bad enough.
I can see this continuing to the point that I just will not continue to be a casino gambler. Can increased efforts to apply the same bad logic to table games be far behind?
Make the hit amount $600 and now you add more dead time to our hourly, starting with 9/6 jacks which will be a taxable for 4OAK and above on $5, 4 deuces and above on $1, wild royals and above on $5, 4 aces on above on DB, and premium 4OAK and above on DDB, Wild royals and above on jokers, etc.
What would suck is the $100 machines now would lock up on every pay except for a high pair on jacks.
They should stick to a X times bet amount for a "jackpot", such as 600 times or better like table games. How pissed would a high roller get if every winning spin was a taxable if they are playing $100 slots.
Quote: djatc
How pissed would a high roller get if every winning spin was a taxable if they are playing $100 slots.
People who play $100 slots don't care about this kind of stuff because they hire an accountant to deal with it. And you can be certain they deduct their losses.
Quote: sc15People who play $100 slots don't care about this kind of stuff because they hire an accountant to deal with it. And you can be certain they deduct their losses.
I'm not talking about their finances but more of the handpays locking people out from what they want to keep doing if they are playing, to keep playing. I know you can load up the machine next to it, but most people would get upset.
Quote: djatcI'm not talking about their finances but more of the handpays locking people out from what they want to keep doing if they are playing, to keep playing. I know you can load up the machine next to it, but most people would get upset.
That's why they have an attendant stand behind the machine in the high limit area to record all the hits for W-2Gs, so the game doesn't stop.
Quote: GWAEI am usually not one to complain about the government but the tax issue on gambling annoys me to no end. Even as it is right now. When I hit my last royal for 2k I got a w2g. I take standard deductions so I can Nor right it off. For the year that yeah I was -1440 in gambling. The casino got taxed like 56% in PA. Not sure what the amount is but I know it is a lot. Then I paid my 30% taxes on that 2k. So now I pay another 600 in taxes and the casino paid 800 in taxes so the government ends up with with 1400 and the casino ends up with 700. What a sham that is.
well, as a homeowner now, by next year, tax year 2015, let's hope you are itemizing deductions.
I've actually lowered my mortgage payment so much after moving that it's touch and go with me.
If the IRS gets this through I can't see myself playing video poker at all. I do not want a W2-g even if assured I can take itemized deductions.
Quote: GWAEI am usually not one to complain about the government but the tax issue on gambling annoys me to no end. Even as it is right now. When I hit my last royal for 2k I got a w2g. I take standard deductions so I can Nor right it off. For the year that yeah I was -1440 in gambling. The casino got taxed like 56% in PA. Not sure what the amount is but I know it is a lot. Then I paid my 30% taxes on that 2k. So now I pay another 600 in taxes and the casino paid 800 in taxes so the government ends up with with 1400 and the casino ends up with 700. What a sham that is.
Yet it probably wouldn't bother you if the payback was changed so that you'd lose another 600 in EV instead of 600 in taxes.
What difference does it make? You're going to lose either way, just consider it as part of the cost of playing a machine.
Quote: GWAEI doubt it. the standard for 4 people is like 13k. Our house payment including taxes is only $709. We are only paying about 3k a year in interest.
Be thankful you're not living in Blue Jersey where taxes, not including mortgage, on the average house are $900 a month. The progressive way.
Quote: sc15You're going to lose either way, just consider it as part of the cost of playing a machine.
What kind of argument is that?
You might as well argue "you have to pay taxes, so I see no reason why everybody shouldnt just give all their money to the government"
Quote: sc15Yet it probably wouldn't bother you if the payback was changed so that you'd lose another 600 in EV instead of 600 in taxes.
What difference does it make? You're going to lose either way, just consider it as part of the cost of playing a machine.
that makes no sense. Of course I would care if the payback was changed. I will no longer play .50 vp because of that.
Quote: odiousgambitWhat kind of argument is that?
You might as well argue "you have to pay taxes, so I see no reason why everybody shouldnt just give all their money to the government"
He's already throwing money away by playing a machine. So play a little less, pay the ridiculous tax, and you're still throwing away the same amount of money.
Quote: AxelWolfIs is possible the IRS would lose money if they tracked all coin in and out since most people who hit jackpots just pay the taxes on that and don't really keep track of daily wins and loses.
Example avrage joe plays all year and normally loses but dosent really add all that up.
now at the end of the year he hits a big jackpot he's happy and just pays the taxes.
A forced tracking system would wize them up.
This is correct. Tracking "net" winnings would result in almost all gamblers being net losers. At least in the long run. Anyone can have a good year or two. Losers owe no taxes. As it is now winnings are reported to the IRS...losses are not. Puts an unfair burden on the player to claim losses via a schedule A (itemized deductions). All W2-G's should reflect NET numbers. Currently they do not. This is an important point most people miss.
Quote: TheBigPaybakQuote: DRichIRS suggests dropping casino winnings threshold to $600'''
Link
This would make higher-limit slot playing almost unplayable and would deter such play. It's hard to imagine the casino lobby would somehow allow this to happen...
Excellent point. Can you imagine having a slot attendant with a yellow legal pad assigned to every $5 Bonus Video Poker Player and Double Double Bonus Player because that's what would have to happen... just like they do now with $100 players.
Quote: RomesThat's my point. I can mathematically prove it's not income.
I love this. You are going to mathematically prove that it's not income when the tax laws say it is income? That will be a very nice trick.
So tell me, do you also think that paying income tax is "voluntary"?
Quote: zoobrewNo the IRS could make big money because the amount of standard deduction would now be taxed. You have $60k in income, and you win $15k in small daily wins and lose $20k in small daily losses. On your taxes your income is now $75k and then minus the $15k in losses on Schedule A and net income for taxes is $60k. Currently it would be $60k income and minus standard deduction of $6.2k or $12.4k or net income for taxes of $53.8k or $47.6k. This is just a very simplified example, but the IRS would come out ahead.
Also if the IRS got real aggressive they could start taxing table game winners, by requiring ID for all cash/chip transactions.
This is correct. Even if you have a net loss gambling, those accumulated W2Gs cause havoc with your taxes.
Quote: DRichIt would definitely reduce the handle some but the truth is that most players would still gamble. I believe it was Missouri that used to require all players to be tracked because they had a limit of how much you could lose per day. You couldn't play without the card and once you lost the amount mandated by the state you could no longer play that day.
I was in favor of that law too. And it was a fairly liberal $500 loss per 2 hours. But you only needed the players card to deposit cash in the machine. You were free to remove your card while playing. It would be dumb to do so since you wouldn't get rated by the casino, but you could.
Repealing the law hasn't increased revenue either.
Quote: GWAEI was watching a guy play $10 video poker. Can you imagin playing that if there was a w2g for $600 wins.
It would be exactly the same as the current law? Lol Unless he's playing some wild card game.
Quote: tringlomaneI was in favor of that law too. And it was a fairly liberal $500 loss per 2 hours. But you only needed the players card to deposit cash in the machine. You were free to remove your card while playing. It would be dumb to do so since you wouldn't get rated by the casino, but you could.
Repealing the law hasn't increased revenue either.
It would be exactly the same as the current law? Lol Unless he's playing some wild card game.
how is $500 liberal?
I win/lose 50K in< 2 hours all the time.
That's kind of correct, with some significant additional qualifications. I think this post by someone on another forum put it about as succinctly and clearly as possible:Quote: AlanMendelsonDon't horse race bettors get a W2G on a payoff of $600 ??
http://www.therxforum.com/showthread.php?t=894066&p=9242826&viewfull=1#post9242826
Quote:1.) Is the wager over 300-1? If yes go to step 2, if no not reported
2.) Is the combined payout for all bets of that type over $600? If yes go to step 3, If no, not reported
3.) Is the combined payout for all bets of that type over $600, but less than $4,999.99? If yes, than W2G, IF no step 4
4.) Is the combined payouts for all bets of that type over $5000.00? If yes than W2G and withholding of federal taxes and state taxes if your state has them
So if I wager $500 and it pays $4,000 for example, that does not meet the test as described above and I do not trigger a "signer" at the track or the book.
Note: This above is ONLY speaking about pari-mutual horse race wagers.
Quote: sc15He's already throwing money away by playing a machine. So play a little less, pay the ridiculous tax, and you're still throwing away the same amount of money.
Are you from Gambler's Anonymous?
If you will forgive me for saying so*, you just seem to be defending this evident notion that the tax collectors of all stripes seem to have, that slots players should be cash cows because they are a bunch of stupid losers - why shouldnt we get some of their money too? And even more money tomorrow, squeeze harder!
Are you not caring because you are a table games player? This 'cash cow' trend does not bode well for any form of gambling.
*this topic sends me over the edge and I am having trouble viewing civilly any other side to it, especially if it seems to be arguing for the sake of arguing, etc
Quote: tringlomaneI was in favor of that law too. And it was a fairly liberal $500 loss per 2 hours. But you only needed the players card to deposit cash in the machine. You were free to remove your card while playing. It would be dumb to do so since you wouldn't get rated by the casino, but you could.
Repealing the law hasn't increased revenue either.
It would be exactly the same as the current law? Lol Unless he's playing some wild card game.
lol I am dumb. I was thinking it would lock up on fh, but I guess that is only $400.
Quote: odiousgambitI think when I do my taxes - I use software - I will pretend I have a $1200 w2-g and see exactly what happens when I try various scenarios [then deleting before filing of course].
I did this last month As well. I even did 20k win with 20k lods. It used itemized return but my return was nearly 2k less.
I also recommend completing your return and then going back to play. I added in fake stuff and when I deleted it my return was different than it was before I added it do I had to start over.
Quote: GWAEmy return was nearly 2k less
and IMO someone with the 20k win would be getting the IRS's attention - as in, should we audit to be sure the taxpayer really had those losses can satisfactorily prove to us, by our rules, that he had those losses?
PS: pretend the bucket says "tax collection from mostly imaginary wins by gamblers"
If I get a w2g thus year, are they to believe that I did not gamble last year. That is a flag IMO
As you can see, I am paranoid.
