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OnceDear
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OnceDear
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December 28th, 2018 at 4:47:30 AM permalink
Quote: WangSanJose

then every person serious about buying lottery should find a Brit agent to buy for them. Tax has a huge impact on the Lottery amount. I'm about to get the green card and realized I'm a taxed resident now, immigrant to England might be a better choice..

If you feel the urge to buy a lottery ticket, just send me your money. I'll take good care of it and you'll never need to worry about the IRS getting their filthy hands on it.
Of course, there is a downside $:o)
Take care out there. Spare a thought for the newly poor who were happy in their world just a few days ago, but whose whole way of life just collapsed..
WangSanJose
WangSanJose
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December 28th, 2018 at 4:53:31 AM permalink
Quote: Wizard

Quote: MichaelBluejay


Sorry for being inactive, I've been researching on this issue extensively. And still, I gathered more dumb questions to clear from my head.
Whether you're a tax expert, or only based on personal experience, any answer is welcomed and helpful!

https://easy.vegas/gambling/taxes#sources
1. "Reporting wins separately from losses increases your AGI, reducing your ability to make other deductions."
Since we are screwed on taxes by wasting our standard deduction. Why don't we go the exact opposite way? If I intentially gamble with large variance, constantly changing games, break my session into pieces(thousands of sessions during a year), both wins and losses would skyrocket, that brings my AGI to a point that makes me look like a wealthy rich.
Let's say I make 40,000 a year from regular job, but report 3 million session wins and 3 million session losses, my AGI becomes 3,040,000.
What are the benefits of a skyrocket AGI? Get a housing morgage with decent interest? Could you shed more light on this matter? It smells like a potential advantage play to me. (e.g. Manufacture win/loss sessions in 2019, get lots of loans, then not gamble at all in 2020 to save the standard deduction.)

2. "A session can't span more than a day."
Does the IRS explicitly state this rule? I didn't find it on the IRS website. If I start playing at 11:30pm, and played till 12:30am, do I have to break my session in half at 12:00am, and report two net results as a requirement?

3. "Starting in 2018, non-pro gamblers can deduct related expenses such as travel to and from the casino."
Where is this information on IRS website?

4. "Supplementary documents include: Wagering tickets, Payment slips, Receipts from the gambling facility."
What is wagering ticket & payment slip?
If you play machines, you got a "Cashout Voucher" after a session, and it can't be kept as an evidence cause you need to cash it out.
If you play table games, when you cash out the chips at the Cashier, nobody gives you a receipt.(can you ask for one?)
What kind of evidence do you guys keep?

5. https://www.irs.com/articles/reporting-gambling-income-and-losses-irs
"Do not deduct your gambling losses or wagers from the amount that you report on your 1040. For example, if you buy a $10 raffle ticket and win a $500 prize, you will report $500 on Line 21 (Form 1040), not $490."
That looks contradicting the IRS' session rule to me. Isn't it a session win of 490?
Or mayble IRS thinks that's two sessions, one session loss of $10, and another session win of $500?

6. "For non-cash prize like car, comp room, report fair market value. "
If I won an unwanted car, what is considered the fair market value? The price of the brand new car on the car's official website, or the price people sell it on Craiglist?

7. Does the IRS require the gambling diary to be contemporary?
I don't use a physical diary, I use excel, so if I got audited and print out my spreadsheets, how to prove it's contemporaneous?
Does the diary has to be in English? If I recorded the gambling log in another language in the first place then translate it, it's not contemporaneous anymore.

8. If filling as a professional gambler, you don't need to itermize on Schedule A(Form 1040), so it won't rip-off your standard deduction, right? I think this might be the best benefit of filing as a pro.

9. Besides federal tax, people have to pay state tax on their income.
Let's say Peter is a California residence, he traveled to another state and won big. Does he pay California state tax or other state tax?
If he won big in California Indian casinos, does he pay California state tax?(or Indian tribal tax, if it exists?)

10. https://www.irs.gov/publications/p529
By my understanding, you must keep a diary regardless if you itermize or use the standard deduction.
If my total session wins=$5,000,
total session losses=$13,000,
received $10,000 in W2gs during the year,
then I choose to use the standard deduction of $12,000 because I can deduct more this way;
If both people report the same gambling winnings(lower than w2g total), one guy use the standard deduction, one guy choose to itermize the losses, does the IRS more likely to audit those who doesn't itermize? or it doesn't matter?

11. I've never received a W2-G Form. From what I observed, when the player received the W2-G, the player's info are not hand-written but typed on the form. How does the whole process go? Does the slot attendant input(using iPad) the player's info infront of the machine after checking the player's DL and SSN?

12. Is the W2-G required to be issued to the person pressing the button?
If Peter and I went to the casino together, I play slot, he sits next to me watching me play. Suddenly, I hit a $1200+ prize. With Peter's permission, can we request the casino to issue the W2-G to Peter?

13.
If Peter and I went to the casino together, I'm playing the slot with Peter's players card plugged in the machine, he sits next to me watching me play. Suddenly, I hit a $1200+ prize.
Do casinos dislike this kind of action?(I'm playing Peter's card, but he's next to me the whole time.)


14. https://www.irs.com/articles/2018-federal-tax-rates-personal-exemptions-and-standard-deductions
Standard deduction for single=$12,000 Standard deduction for couple=$24,000
If it's allowed to choose who's name show on the W2-G, is it a good idea for husband and wife to file seperately to save the standard deduction of $12,000?
Husband has $50,000 income, $0 gambling winnings. Husband uses the $12,000 standard deduction to reduce his income to the 12% bracket.
Wife has $30,000 income, $80,000 gambling winnings, $120,000 gambling losses. Wife intermizes to reduce his $80,000 gambling winnings to zero.
The result seems to be much better than "Married Filling jointly", saves about $2500 in this particular situation.

15. https://wizardofodds.com/indexnew.php?p=article&id=1065
From Wizarrd's article, we can see that VP return is much worse than expected cause the itermized deduction is wasted on gambling session wins.
I guess the only group of people that can achieve full 99.54% return on JoB are those who have tremendous loans, lots of itermized deductions, that their deduction have already exceeds $12,000 a year. Since they already itermized, if their reported gambling losses equal to the gambling wins, he losses nothing.

In conclusion, if you don't already have itermized deductions over $12,000, don't play machines that has $1200 or higher payout. Correct me if I'm wrong.
Last edited by: unnamed administrator on Aug 18, 2019
Great
AcesAndEights
AcesAndEights
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December 28th, 2018 at 6:47:44 AM permalink
Quote: cmlotito

Quote: GWAE

Quote: WangSanJose

Isn't the tax bracket based on net income?
I think the 364k losses offset the 364k wins, so the original 50k income is still at the low-end bracket.



Hmmm maybe

Just looked, tax bracket is based on net. I was wrong. However in that example your agi would be effected. It wont change your tax bracket but it does affect other things that are based on agi.



My AGI last year was well over 400k due to jackpots while my net income was well under 100k. When I was putting all the w2gs into turbo tax I noticed I was paying a higher percentage of tax. I would say your tax bracket is based on agi not net income based on what I observed.


No, this is completely wrong. You probably saw the tax percentage going up as you put in the W-2Gs because you hadn't put in the losses in on Schedule A yet. Once you put in that offset, the percentage would have gone back down.

Tax rate and amount is absolutely based on net (AGI minus deductions). As GWAE noted most recently, increased AGI does have an adverse impact on other things, like eligibility for Roth IRA contributions and various other deductions and credits.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
AcesAndEights
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December 28th, 2018 at 6:55:45 AM permalink
Where to start, where to start. Not going to answer all of your questions but will hit a couple.
Quote: WangSanJose

https://easy.vegas/gambling/taxes#sources
1. "Reporting wins separately from losses increases your AGI, reducing your ability to make other deductions."
Since we are screwed on taxes by wasting our standard deduction. Why don't we go the exact opposite way? If I intentially gamble with large variance, constantly changing games, break my session into pieces(thousands of sessions during a year), both wins and losses would skyrocket, that brings my AGI to a point that makes me look like a wealthy rich.
Let's say I make 40,000 a year from regular job, but report 3 million session wins and 3 million session losses, my AGI becomes 3,040,000.
What are the benefits of a skyrocket AGI? Get a housing morgage with decent interest? Could you shed more light on this matter? It smells like a potential advantage play to me. (e.g. Manufacture win/loss sessions in 2019, get lots of loans, then not gamble at all in 2020 to save the standard deduction.)


I don't believe there are any benefits to having a large AGI. Could be wrong, but only detriments as far as I know.
Quote:

8. If filling as a professional gambler, you don't need to itermize on Schedule A(Form 1040), so it won't rip-off your standard deduction, right? I think this might be the best benefit of filing as a pro.


Yes, this is a huge benefit of being a pro. However it comes with a downside as well - since you are filing Schedule C, your net gambling income is considered self-employment income, and you are on the hook for payroll taxes (about 13%) in addition to standard federal income taxes. However the upside is that this money counts in your contribution to social security and will increase your eventual SS retirement benefits.
Last edited by: unnamed administrator on Aug 18, 2019
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
billryan
billryan
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December 28th, 2018 at 10:03:50 AM permalink
Are you suggesting that a person who pays self employment taxes on a $100,000 income will get better retirement benefits than a worker who earns $100,000?
ChumpChange
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December 28th, 2018 at 10:40:55 AM permalink
Don't you have to gamble 1000 hours a year just to be considered a pro? All this jabbering on forums or playing WinCraps doesn't seem to count as hours.
ChumpChange
ChumpChange
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December 28th, 2018 at 10:45:30 AM permalink
Quote: WangSanJose



In conclusion, if you don't already have itermized deductions over $12,000, don't play machines that has $1200 or higher payout. Correct me if I'm wrong.



If I'm trying to upgrade from the penny slots to the high limit slots room, the IRS is gonna know about it!
AcesAndEights
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December 28th, 2018 at 12:20:26 PM permalink
Quote: billryan

Are you suggesting that a person who pays self employment taxes on a $100,000 income will get better retirement benefits than a worker who earns $100,000?


No, but they will get better retirement benefits than someone who nets 100k as an amateur gambler. That is the distinction I was making, as the amateur doesn't pay SE taxes on that income.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
AcesAndEights
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December 28th, 2018 at 12:23:18 PM permalink
Quote: ChumpChange

Don't you have to gamble 1000 hours a year just to be considered a pro? All this jabbering on forums or playing WinCraps doesn't seem to count as hours.


There's no hours requirement, you just have to be honestly attempting to support yourself through gambling.

Basically every time Russell Fox is on GWAE they discuss this. Go and listen.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
Wizard
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Thanks for this post from:
AcesAndEightsodiousgambit
December 28th, 2018 at 2:10:59 PM permalink
Quote: cmlotito

I would say your tax bracket is based on agi not net income based on what I observed.



I would say not.

Line 37&38: AGI
Line 40: Itemized or standard deduction
Line 41: Line 38 less Line 40
Line 42: Exemptions
Line 43: Line 41 less Line 42
Line 44: Tax, based on the amount in line 43.
It's not whether you win or lose; it's whether or not you had a good bet.

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