Thread Rating:

Wizard
Administrator
Wizard
Joined: Oct 14, 2009
  • Threads: 1336
  • Posts: 22055
Thanks for this post from:
IndyJeffrey
December 17th, 2018 at 5:11:20 PM permalink
My 9-6 Double Double Bonus simulation is done and I have posted the results to my new page Taxable Return from Video Poker. So far it has 9-6 DDB only, but I'm planning to add some other common games skilled video poker players are likely to play. Currently simulating 9-6 Jacks.

Please click the link and let me know what you think. As always, I welcome all questions, comments, and especially corrections.
It's not whether you win or lose; it's whether or not you had a good bet.
mustangsally
mustangsally
Joined: Mar 29, 2011
  • Threads: 25
  • Posts: 2463
December 17th, 2018 at 6:30:02 PM permalink
Quote: Wizard

Please click the link and let me know what you think. As always, I welcome all questions, comments, and especially corrections.

You mention that the standard deduction increased and it looks like it did.
Across the board.

But, to me, at the same time, the personal exemption (IIRC about $4k) was eliminated.
So, to me, they added that to the standard deduction and threw on a few extra $$$s to make it look like icing on the cake. (unless it just went up for inflation adjustment - then there is NO icing on the cake)

I am not a tax pro by any means but it is very easy to look this stuff up and compare to the past few years.

thank you for taking the time to do this.
This thread touches on tax laws that just are not explicitly pointed on a single form or info page.

I guess the IRS wants it that way
they take so much from me each year
Sally

about 2
I Heart Vi Hart
Wizard
Administrator
Wizard
Joined: Oct 14, 2009
  • Threads: 1336
  • Posts: 22055
December 17th, 2018 at 6:51:09 PM permalink
Thank you for your comments Sally. I may do a whole separate page about how taxation of gambling winnings is supposed to be handled and how most people actually handle it to avoid an audit.

I have never eaten a half can of soup. Never. Two servings per can my patoot!

It's not whether you win or lose; it's whether or not you had a good bet.
ChumpChange
ChumpChange
Joined: Jun 15, 2018
  • Threads: 31
  • Posts: 1275
December 17th, 2018 at 7:54:09 PM permalink
Quote: beachbumbabs

I would think a two-sided card in your wallet, and your smart phone would be admissible documentation. Spread your br with a card that says "starting br", take a picture and save it. When you're done playing, flip the card over where it says "ending br" and shoot that with the money spread out.

Those will have the date and time, along with whatever log you're making for the games you play. Better even might be chip racks/stacks that are countable if you're on tables, or TITOs before you cash in.



Interesting idea if I believed in compliance of any sort. I can't even scan dollar bills anymore because of software restrictions.
Nothing makes the pit jumpier than somebody reaching for their phone at the tables. I'll have to find a place away from the tables or the cage to take pictures.
It brings me back to my theory that I'd have to count my br before I leave home and again when I get home, where I can actually get some lighting. I can include the travel time in the time stamp spreads. I really hate making evidence for a scam IRS though.
100xOdds
100xOdds
Joined: Feb 5, 2012
  • Threads: 514
  • Posts: 3017
December 17th, 2018 at 7:56:39 PM permalink
Quote: Wizard

Quote: MichaelBluejay

Well, did you read the article? You *do* report your wins as a single integer (and your loss as a single integer, if you're itemizing.) What you *don't* do is subtract your losses from your wins and report the net profit as your income. You also don't submit your daily journal, that's just backup in case you get audited.



I do not dispute this is what you're supposed to do.

Let's look at an example.

Johnny is single with a work income of $100,000. He has absolutely nothing to deduct on schedule A except, perhaps, gambling losses.

The standard deduction for 2018 for individuals is $12,000 (source: forbes.com).

The marginal tax rate for income between $82,501 and $157,500 in 2018 is 24% for individual filers. (same source)

Summing up every individual session, here are Johnny's gambling results for 2018:

Wins: $12,000
Losses: $32,000

If my understanding is correct, he would have to pay taxes on $100,000 in income. Whether he itemizes or not, he deducts the same $12,000 from $112,000 in AGI.

The situation for Mary is exactly the same, except she didn't gamble at all. She uses the standard deduction and pays income on $88,000.

So, John actually lost $20,000 gambling and ends up paying 24%*$12,000 = $2,880 more in taxes than Mary.

Do I have that right? Does that sound fair?


so if johnny had $8k worth of deductions (ie: property taxes on his house + mortgage deduction), then he could have added that $12k gambling loss for 20k deductions.

so $8k of that $12k gambling loss would have been put to use.

this is no different than before the Trump tax law changes, except the combined personal and standard deduction was lower.

am I correct?
if not, where's my flaw?
Craps is paradise (Pair of dice). Lets hear it for the SpeedCount Mathletes :)
100xOdds
100xOdds
Joined: Feb 5, 2012
  • Threads: 514
  • Posts: 3017
December 17th, 2018 at 7:57:20 PM permalink
Quote: Wizard

I may do a whole separate page about how taxation of gambling winnings is supposed to be handled and how most people actually handle it to avoid an audit.

yes please!
Craps is paradise (Pair of dice). Lets hear it for the SpeedCount Mathletes :)
gordonm888
gordonm888
Joined: Feb 18, 2015
  • Threads: 38
  • Posts: 2605
December 17th, 2018 at 8:05:37 PM permalink
Quote: Wizard

My 9-6 Double Double Bonus simulation is done and I have posted the results to my new page Taxable Return from Video Poker. So far it has 9-6 DDB only, but I'm planning to add some other common games skilled video poker players are likely to play. Currently simulating 9-6 Jacks.

Please click the link and let me know what you think. As always, I welcome all questions, comments, and especially corrections.



I had this exact problem in 2017 - I claim the standard deduction every year (recently) and I had a win in a 2017 poker tournament of about $10,000 -recorded by a W2G form. I had to pay a couple of thousand dollars in taxes because I could not claim off-setting losses from enetring other poker tournaments and from losing gambling sessions. That was very sobering and brought this issue into sharp focus for me.

Since then I have avoided playing these games:
DDB Video poker
Mississippi Stud and UTH because a significant amount of their equity is in large payouts that will trigger W2G forms.
Side bets on table games with payouts that will exceed $1,500.

I have even avoided playing in major poker tournaments this year because so much of the equity is in large payouts for going deep in the tournament.

I am glad to see that the tax issue has surfaced and is being understood.
So many better men, a few of them friends, were dead. And a thousand thousand slimy things lived on, and so did I.
billryan
billryan
Joined: Nov 2, 2009
  • Threads: 172
  • Posts: 9616
December 17th, 2018 at 8:09:48 PM permalink
It's certainly surfaced. I'm not sure how well its understood, but it's a discussion well worth having. If the information is accurate and timely.
Wizard
Administrator
Wizard
Joined: Oct 14, 2009
  • Threads: 1336
  • Posts: 22055
December 17th, 2018 at 8:43:42 PM permalink
Quote: 100xOdds

so if johnny had $8k worth of deductions (ie: property taxes on his house + mortgage deduction), then he could have added that $12k gambling loss for 20k deductions.

so $8k of that $12k gambling loss would have been put to use.

this is no different than before the Trump tax law changes, except the combined personal and standard deduction was lower.



That looks right. How much you otherwise itemize definitely figures into it. Basically, if you're between the 2017 and 2018 standard deductions, as is the case with me, then this change in the law effects you.

This is a result of the Trump tax law change. Given that he used to have his name on three Atlantic City casinos, you would think he would have had thrown gamblers a bone and let them deduct before itemizing.
It's not whether you win or lose; it's whether or not you had a good bet.
Wizard
Administrator
Wizard
Joined: Oct 14, 2009
  • Threads: 1336
  • Posts: 22055
December 17th, 2018 at 8:47:16 PM permalink
Quote: 100xOdds

yes please!



Thanks! Until I do, MichaelBluejay's page is a good source on how taxes are supposed to be done. However, almost nobody follows the "session" method that you're supposed to and I'd like to address how to file if you want to keep the IRS happy and not get an audit.
It's not whether you win or lose; it's whether or not you had a good bet.

  • Jump to: