Tax Questions Solicited
Any tax questions posted here by this coming Monday will be considered.
Example with made up percentages: If you make $30k per year, your effective tax rate is 27%. If you make $100k per year, your effective tax rate is 33%... etc.
Is there anything a gambler could do to avoid getting placed in a higher tax bracket due to one big win this year, when other years were losing years?
Anyways, I do have a question .
Can someone create a c corp or some other business and play under that. If so can you give a tax Id instead of social on hand pays.
People might roll their eyes at thia idea but If this is possible I know you may pay more taxes in the long run but there may be other tax advantages for lower income people.
Ie:
heard from a 7star in the diamond lounge that you can write off $10k before the IRS hassles you for proof because that's how much it costs the IRS to perform an audit?
I believe you are referring to the foreign earned income exclusion which you can get by living in a foreign country for over 330 full days in a year. I doubt gambling could qualify as earned income.Quote: HunterhillIf you gamble outside the U.S. and stay out of the r more than 11 months can you claim an exemption?
Quote: Ace2I believe you are referring to the foreign earned income exclusion which you can get by living in a foreign country for over 330 full days in a year. I doubt gambling could qualify as earned income.
Yes that's exactly what I was asking about.
2. Is it true the United States is the only country to tax gambling winnings?
Yes, you can give a Tax ID number instead of a social on hand pays in NV. This tactic has been employed for people who are in a fixed income situation but work for other AP's. I'm not sure what the exact legality of it is, but the casinos have accepted it and there were no issues after the fact. Not sure about California, they check and make sure your name and SS match. If your name and SS is not in the system they won't pay you until you bring more proof. I know people that who hit taxable Jackpots in NV without a problem, but for some reason, if something doesn't match in California they are I initially denied the cash.Quote: GWAEI usually stay out of your threads so no one gets confused since my moniker is your shows initials by accident. I think most people on here know, but I waned to put this little blurb on this post so I don't confuse anyone. My name actuslly stands for gambling without an edge but my dodo brain didn't realize that the initials are the same since without is 1 word.
Anyways, I do have a question .
Can someone create a c corp or some other business and play under that. If so can you give a tax Id instead of social on hand pays.
People might roll their eyes at thia idea but If this is possible I know you may pay more taxes in the long run but there may be other tax advantages for lower income people.
Quote: GWAEI usually stay out of your threads so no one gets confused since my moniker is your shows initials by accident. I think most people on here know, but I waned to put this little blurb on this post so I don't confuse anyone. My name actuslly stands for gambling without an edge but my dodo brain didn't realize that the initials are the same since without is 1 word.
Anyways, I do have a question .
Can someone create a c corp or some other business and play under that. If so can you give a tax Id instead of social on hand pays.
People might roll their eyes at thia idea but If this is possible I know you may pay more taxes in the long run but there may be other tax advantages for lower income people.
+1
I would also like to know this. You could take advantage of the tax laws because a c-corp's income tax rate is generally less than an individual's tax rate. You could then leave the money in the c-corp and grow the bankroll. A c-corp can offer all kinds of cool things for their shareholders/owners, like a pension plan, medical expense reimbursement, etc. which all are advantageous in a tax situation.
To get money out of your c-corp, you could either take a dividend (taxed at long term capital gains) or just take a standard W-2 employee salary. The latter may be more attractive because your salary becomes a deductible expense from the C-corp, and that W-2 income counts as "earned" (working) income, for social security purposes.
Would casinos try to withhold tax? If so, how would I get that tax back, assuming that no tax is actually due from me?
Would I have problems bringing my winnings out of the states? What would be the best way to get my winnings home?
Or you could try to avoid the withholding at the time of the win but I doubt you could. Showing a foreign passport demonstrates you are a citizen of that country but it doesn’t prove your are exempt from US taxes. You can be a US citizen and have a foreign passport.
There’s no issue with bringing cash home. But you are suppposed to declare it in some cases (for instance entering the USA with over $10,000).
1. I want to enlist a friend to play blackjack. They will risk no money, it will be just my bankroll. I don't play. I will pay them $20/hr. How will each of us fill out our taxes?
2. I want to enlist a friend to play blackjack. They will contribute 25% of the team bankroll and I will contribute 75% of the team bankroll. I don't play. I will pay them $10/hr. How will each of us fill out our taxes?
3. Same situation as question 1 except that video poker is now being played. W2Gs are generated.
4. Same situation as question 2 except that video poker is now being played. W2Gs are generated.
5. Same questions as 1-4, but at the state level. For example, the friend lives in a state with no state income tax, but is playing in a state with state income tax.
6. Do you pay taxes on gambling income from other countries? Can you deduct gambling losses from other countries?
7. A ship sails a few miles out from the US coast. We are in international waters. Gambling occurs. Do you report gambling wins and losses that occur?
As a US citizen you must report all global income on your tax return, regardless of how/where you got it or where you live in the world.
This is why some people renounce or attempt to renounce US citizenship. From the moment you’re born in the USA the IRS demands a piece of everything you’ll ever earn. They have the power to put you in prison, fine you huge amounts for honest mistakes, cancel your passport at their discretion.
FYI, the gambling boats I have been on out of FL & GA sail outside state-controlled waters (at 3 miles out), but are not in international waters (at 12 nautical miles out). Also, these boat as well as cruise ship casinos will issue W2-G's for handpays.Quote: Avincow7. A ship sails a few miles out from the US coast. We are in international waters. Gambling occurs. Do you report gambling wins and losses that occur?
As I understand it there is a 1975 treaty between the USA and the UK which says that I would not be liable to any US tax or withholding on such winnings.Quote: Ace2If you have a single win significant enough to generate a tax withholding, I think the only way you might recover that is by getting a credit on your UK taxes for foreign taxes paid. You could try and claim it back from the IRS but they will probably want to see evidence that you have current year losses to offset the win.
Or you could try to avoid the withholding at the time of the win but I doubt you could. Showing a foreign passport demonstrates you are a citizen of that country but it doesn’t prove your are exempt from US taxes. You can be a US citizen and have a foreign passport.
There’s no issue with bringing cash home. But you are suppposed to declare it in some cases (for instance entering the USA with over $10,000).
Full treaty from IRS site https://www.irs.gov/pub/irs-trty/uk.pdf
Apparently I need to give a TIN number to the casino, which would probably my UK National Insurance number ( Which is like your US SSN )
But it does need some explanation. And I'd still like to know how to extract the funds to the UK. There are requirements to declare big sums of money to UK customs, but that does not mean they would be confiscated or taxed. Id just need to explain the source of such funds for money laundering purposes.
If they weren’t in cash you do a bank transfer (I do them occasionally between US and UK/others).
I kind of doubt the staff at the cashier cage are familiar with your UK National Insurance number or the fine points of US-UK tax treaties. But who knows.
I'd feel uneasy carrying >$10,000 onto a trans-pacific flight and would probably feel more at ease wire-transferring the value to my UK bank. I'd also want to minimise currency translation costs. I don't know how easy that would be, not being an account holder at any US bank.Quote: Ace2What do you mean by extract the funds? They’re in cash. You said there’s no UK tax on them so even you have to declare them upon entry you can just say you won them in Vegas, and you even have documentation.
Even if they weren’t in cash you just do a bank transfer (I do them occasionally between US and UK/others).
I kind of doubt the staff at the cashier cage are familiar with your UK National Insurance number or the fine points of US-UK tax treaties. But who knows.
Actually, I suspect there are enough UK tourists in Vegas that there would be someone on duty with knowledge of the correct paperwork.
Quote: BobDancerNext Tuesday, we'll be interviewing Russell Fox on GWAE. Russell Fox is a tax expert --- where many of his clients are gamblers.
Any tax questions posted here by this coming Monday will be considered.
it's now weds.
what answers did he give to our questions?
Quote: 100xOddsit's now weds.
what answers did he give to our questions?
You're supposed to listen to his show.
Quote: JoemanFYI, the gambling boats I have been on out of FL & GA sail outside state-controlled waters (at 3 miles out), but are not in international waters (at 12 nautical miles out). Also, these boat as well as cruise ship casinos will issue W2-G's for handpays.
The company I worked with never issued W2-G's for jackpots hit when the ship was at sea.
link?Quote: tringlomaneYou're supposed to listen to his show.
Quote: 100xOddslink?
Doesn't appear to be posted yet, but should show up here soon.
https://www.lasvegasadvisor.com/gambling-with-an-edge/category/podcast/
Hmm... I guess I was basing that generalization on my personal experience on a Carnival cruise. Is it up to the cruise lines whether or not to issue W2-G's? Or does it depend on the location of the ship's home port?Quote: DRichThe company I worked with never issued W2-G's for jackpots hit when the ship was at sea.
It must not be the ship's country of registry, because this was aboard the Carnival Sensation, which has Bahamian registry.
It will be posted on Thursday.
Thank you all for your suggestions. Most of them "made the cut" and were on the show.
Quote: BobDancerThe show has been taped.
It will be posted on Thursday.
Thank you all for your suggestions. Most of them "made the cut" and were on the show.
my question wasn't used :(
Mine was. Got my answers at about 34:00. Hitting a slot jackpot could be a pain in the 455.Quote: 100xOddsmy question wasn't used :(
I will sing my old song: *avoid* the w2-g, ladies and gentlemen.Quote: OnceDearMine was. Got my answers at about 34:00. Hitting a slot jackpot could be a pain in the 455.
Note that I used the word 'avoid'. Avoidance is OK, evasion is not. I do guarantee you though, Fox would not agree with the notion behind this statement!!
If it was this one,Quote: 100xOddsmy question wasn't used :(
Maybe it sounded too much like a 'tax evasion' question, which Fox said he could not entertain. Or maybe it will be included in part 2.Quote: 100xOddsHow much in w2-g can you write off in gambling loses before the IRS flags your return for an audit?
Some of the other included questions kind of covered that anyway?
Starting at about 7:45 there is a segment everyone should listen to. The way the IRS automatically flags a lot of gambling reporting, including when "using the session method" to balance wins against losses, is a real horror story to me. Now Fox says the notice they send is no big deal [it is not a notice there will be an audit] ; unfortunately in answering he includes the phrase "most of the time". Maybe I am especially allergic to the notion of dealing with IRS flagging, maybe most people say "yep, no big deal, flag me, don't flag me". To me though, this is the stuff of nightmares.
Just saying ... laying out that reasoning for "no W2-gs for me!"
Good show!
