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AcesAndEights
AcesAndEights
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December 12th, 2018 at 8:36:00 AM permalink
Quote: OnceDear

Declaring or not declaring tax on gambling winnings: You guys crack me up.

As others have said, just because the casino isn't handing you paperwork, you still have to declare every last dollar... Unless you surrender your US citizenship and emigrate. Don't you guys even have to declare winnings from anywhere in the world, E.g.. while on vacation to Europe?

Must be a real PITA to do anything like properly.


Yeah, US is one of the few places that taxes world-wide earnings of its citizens. Good ol' Uncle Sam. Always need to get his beak wet.

https://en.wikipedia.org/wiki/International_taxation#Taxation_systems
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
billryan
billryan
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December 12th, 2018 at 8:49:36 AM permalink
My guy was telling me that the new tax laws allow non-pros to deduct expenses from winnings. I hadn't read that anywhere else.
AcesAndEights
AcesAndEights
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December 12th, 2018 at 8:58:46 AM permalink
Quote: billryan

My guy was telling me that the new tax laws allow non-pros to deduct expenses from winnings. I hadn't read that anywhere else.


Hmmm, I haven't heard that anywhere either. GWAE just had one of their tax guys on (Russel Fox), and I think this came up, but I must have glossed right past it.

Here is a supporting link:
https://www.accountingweb.com/tax/individuals/gambling-loss-deductions-broadened-under-new-tax-law

The upshot is you are correct, but losses + expenses still can't be deducted above wins if you are a non-pro.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
MichaelBluejay
MichaelBluejay
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ChumpChangeLottoballs
December 13th, 2018 at 12:45:46 AM permalink
Probably the biggest misconception about taxes is the idea that you're supposed to tally your W-2G winnings and enter that as your gambling income. This is flat-out wrong. Actually, you tally up your session wins, and report that total as your gambling income. That total will likely bear no resemblance to your W-2G total. You can have a fistful of W-2G's but still report zero gambling winnings, if your session losses total zero.

That happened to me in 2008, when I was chasing comps on a video poker machine that supposedly was accruing 5x more slot points than it was supposed to. I got probably $6000+ in W-2Gs but reported zero gambling income, because I never had a session win.

Here's my detailed article on gambling taxes, which includes six separate references for the fact that you don't blindly total and report the W-2G amounts.
Last edited by: MichaelBluejay on Sep 10, 2019
ChumpChange
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SOOPOO
December 13th, 2018 at 1:37:11 AM permalink
Where do I stop? 32%, 35% or 37%?
Here are your new income tax brackets for 2019. https://cnb.cx/2EqeW76
AcesAndEights
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MichaelBluejay
December 13th, 2018 at 5:33:01 AM permalink
Quote: MichaelBluejay

Probably the biggest misconception about taxes is the idea that you're supposed to tally your W-2G winnings and enter that as your gambling income. This is flat-out wrong. Actually, you tally up your session wins, and report that total as your gambling income. That total will likely bear no resemblance to your W-2G total. You can have a fistful of W-2G's but still report zero gambling winnings, if your session losses total zero.

That happened to me in 2008, when I was chasing comps on a video poker machine that supposedly was accruing 5x more slot points than it was supposed to. I got probably $6000+ in W-2Gs but reported zero gambling income, because I never had a session win.

Here's my detailed article on gambling taxes, which includes six separate references for the fact that you don't blindly total and report the W-2G amounts.


Great page, MB. I especially like your breakdown of the unfair aspects of gambling taxes. Really gets the blood boiling early in the day.
Last edited by: unnamed administrator on Sep 10, 2019
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
Wizard
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Wizard
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December 13th, 2018 at 6:06:52 AM permalink
Quote: billryan

My guy was telling me that the new tax laws allow non-pros to deduct expenses from winnings. I hadn't read that anywhere else.



That has always been the case as long as I can remember, pros and non-pros. As MichaelBluejay wrote, you're supposed to declare your net profit at the end of the year. In other words, you can offset losses against your W2G wins. You are also supposed to declare all wins.

The IRS can always audit you for any reason they wish and ask to see evidence of offsetting losses, which is why you should keep records.

Nathan brought up the situation of playing a $100 denom ($500 total bet) video poker machine. I've seen slot players betting around this much and an attendant would stand right next to the machine the whole time. With every win of $1200 or more, she wrote down the win in a record, had the player initial it, turn a key, and the player was good to go. In other words, only about a 15 second delay for each jackpot.
It's not whether you win or lose; it's whether or not you had a good bet.
MichaelBluejay
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Lottoballs
December 13th, 2018 at 6:14:30 AM permalink
Quote: Wizard

That has always been the case as long as I can remember, pros and non-pros. As MichaelBluejay wrote, you're supposed to declare your net profit at the end of the year. In other words, you can offset losses against your W2G wins.



Uh, not exactly. You don't declare your net profit, and my article makes that clear. You report your total wins as income in one place ("wins" being the sum of all winning sessions), and, if you itemize, all your losses in another place ("losses" being the sum of all losing sessions). Whether or not you received W-2Gs is irrelevant, since those amounts aren't used for tax purposes. For that reason, the IRS ought to stop requiring casinos to hand out those completely worthless forms.
beachbumbabs
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December 13th, 2018 at 6:14:31 AM permalink
Quote: Wizard

That has always been the case as long as I can remember, pros and non-pros. As MichaelBluejay wrote, you're supposed to declare your net profit at the end of the year. In other words, you can offset losses against your W2G wins. You are also supposed to declare all wins.

The IRS can always audit you for any reason they wish and ask to see evidence of offsetting losses, which is why you should keep records.

Nathan brought up the situation of playing a $100 denom ($500 total bet) video poker machine. I've seen slot players betting around this much and an attendant would stand right next to the machine the whole time. With every win of $1200 or more, she wrote down the win in a record, had the player initial it, turn a key, and the player was good to go. In other words, only about a 15 second delay for each jackpot.



Some places (notably Cosmo) have it so their high rollers can acknowledge the win, put in a pin, and spin. Takes 10 seconds, no attendant needed. But I think the account needs to be pre-set, signature collected, to do it, and I would guess you've agreed to receive paperwork at the cage or something, after you're done. Your jackpot just goes to your balance, and you cash out to a TITO.
If the House lost every hand, they wouldn't deal the game.
MichaelBluejay
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December 13th, 2018 at 6:21:49 AM permalink
Quote: AcesAndEights

Great page, MB. I especially like your breakdown of the unfair aspects of gambling taxes. Really gets the blood boiling early in the day.

Well, if you like that, then you'll like this one. I didn't add it to the page because I didn't want to clutter it:

Gambling wins shouldn't be taxable at all, not because I think taxation is inherently evil (I don't), but because gambling is an overall expected loss, so there's no overall profit. Consider all the gambling done by all Americans over the course of a year: casino, sports, lottery, etc. The grand total is a loss for the players, and a profit for the operators. So where's the income to tax?!

This is true even for the multi-state lotteries with jackpots of hundreds of millions of dollars. If the government wants to tax those winnings, then to be fair they'd need to allow players to FULLY deduct their lottery losses, (1) even in excess of winnings, and (2) in excess of the standard deduction, because if you don't get to deduct in excess of the standard deduction, then you don't really get a tax benefit. Meaning, someone who never plays the lottery gets the same standard deduction as someone who does, so lottery players effectively don't get a tax benefit on their losses, but winners get a tax bill on their wins. Not fair.

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