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100xOdds
100xOdds
Joined: Feb 5, 2012
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January 26th, 2019 at 3:25:33 PM permalink
Quote: sltploppy

I had made another reply however wanted to call out and thank MBJ for his article.
I did some independent research and also looked at the resources cited in his article. The one thing that I learned is that Session Accounting (for those who have over 12k in W2G's for 2018 and live in the one of the "bad" states for gambling) can be a huge advantage for State Tax filing if your state recognizes it as legitimate (from my reserarch not every state has weighed in on the validity of Session Accounting for state income purposes).


why did you pick 12k as the threshold for w2-g's for 2018?
what was the threshold for 2016 + 2017?
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DRich
DRich
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January 28th, 2019 at 7:01:42 AM permalink
Quote: 100xOdds


why did you pick 12k as the threshold for w2-g's for 2018?
what was the threshold for 2016 + 2017?



Probably because that is the standard deduction for a single filer for 2018 taxes. I believe it was $6300 last year.
Living longer does not always infer +EV
100xOdds
100xOdds
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January 29th, 2019 at 3:51:01 AM permalink
Quote: DRich

Probably because that is the standard deduction for a single filer for 2018 taxes. I believe it was $6300 last year.

oh.. Thought it was increased to $10k. So now it makes sense.
Thx
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MichaelBluejay
MichaelBluejay
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April 13th, 2019 at 8:37:50 AM permalink
Quote: odiousgambit

As for Michael Bluejay's webpage, I still think he needs to acknowledge somewhere on that page that the IRS may consider amounts on line 21 less than W2 totals to be a flag. Maybe not a red flag, but a flag. If this claim is still not deemed credible, or the belief that it is easily handled is prevailing, a mention of it at least is very much due, it's owed to those who would read it. Otherwise, yeah, I'd say he is showing he feels he had nothing to learn himself.

Sorry to be replying to this so late. Anyway, I always have a lot to learn, and when I learn, I like to share, which is why I write articles. I did add quite a bit of text about the possibility of getting an IRS letter (if reported gambling income doesn't match W-2G figures), how to prevent it, and what to do if it happens. I hope the revised article addresses your concern: https://vegasclick.com/gambling/taxes
MichaelBluejay
MichaelBluejay
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April 13th, 2019 at 9:17:32 AM permalink
Sorry I'm only just now seeing this post and replying to it.

Quote: WangSanJose

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?

I can't find a reference to it either. I think I was looking at the *proposed* definition. So, I edited the article, to say that I don't think it's reasonable [i.e., just my opinion] for a session to span more than a day, unless you play constantly without stopping to eat or sleep.

Quote: WangSanJose

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?

Publication 529.

Quote: WangSanJose

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?

Most games don't have tickets, but some do (e.g., lottery, keno). Payment slips are probably rare; I'm just quoting the IRS wording. Remember, it says all this is *supplementary* documents, not *primary* documents. Your primary document is your session journal.

Quote: WangSanJose

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?

I think the IRS assumes that you buy the raffle ticket one day and the drawing is some days later. If the drawing was held within an hour after you bought a ticket, I'd count that as a session win of $490.

Quote: WangSanJose

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?

The fair market value (FMV) is unrelated to whether you want the item or not. FMV is the price a person could reasonably expect to pay for the same item. If you're challenged, you need to show that your estimate of FMV was reasonable. If win a new car, it's not reasonable to claim the price for a used car on Craigslist. I think it would be reasonable to print out the web page of a dealership advertising the same model at a certain price, even though everyone knows that a savvy consumer can negotiate a better price.


Quote: WangSanJose

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.

Russell Fox, CPA addressed this briefly in the radio show which is linked to in the Additional Sources in my article. He said in one case the IRS looked at the creation date of the file, and wanted to see old backups to verify that the data hadn't been fudged at a later date. I don't know how that would work for me, because I keep my data in the note pad on my phone, in a file-less OS. If challenged, I'd argue that there's nothing in the IRS code that mandates that the creation date in the OS be visible. The IRS doesn't specifically address the question of language in the diary. I quoted the important bits from the IRS docs. If you want to see what the IRS actually says, you can follow the links to see the actual wording.

Quote: WangSanJose

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. Professional gamblers will record income and expenses on Schedule C, not on Line 21 and Schedule A.

Quote: WangSanJose

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?)

You always pay tax in your state of residence, not the state where you won.

Quote: WangSanJose

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?

Some time after you asked this question, I added a large section to the article to address this very question. It's too long to answer here.

Quote: WangSanJose

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 in front of the machine after checking the player's DL and SSN?

I haven't received one in years so I don't know whether they're using tablets or not, but years ago, they'd ask to see my photo ID, they'd ask my SS#, then they'd disappear, and return with the form.

Quote: WangSanJose

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?

It's well-established that the person who presses the button is the winner, regardless of who funded the spin. This has led to some nasty court battles and broken friendships. It's sad that some people can't share.

Quote: WangSanJose

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.

That sounds right to me. This is one of the reasons I say in the article that gambling taxes are unfair. They ought to be abolished.
100xOdds
100xOdds
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April 27th, 2019 at 3:20:04 PM permalink
which app do you guys recommend to record daily sessions?

or stick with a small pocket sized notebook?
Craps is paradise (Pair of dice). Lets hear it for the SpeedCount Mathletes :)
MichaelBluejay
MichaelBluejay
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April 27th, 2019 at 3:35:01 PM permalink
The "Notes" app (iOS). You can also run spreadsheets on mobile but Notes loads faster.
100xOdds
100xOdds
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April 27th, 2019 at 4:18:21 PM permalink
Quote: MichaelBluejay

The "Notes" app (iOS). You can also run spreadsheets on mobile but Notes loads faster.


whoops.. should have mentioned Android phones
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MichaelBluejay
MichaelBluejay
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April 27th, 2019 at 5:41:28 PM permalink
I'm sure there are a gazillion free notepad apps for Android, probably one built-in.
tringlomane
tringlomane
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April 27th, 2019 at 10:00:17 PM permalink
Quote: MichaelBluejay

I'm sure there are a gazillion free notepad apps for Android, probably one built-in.



My Samsung phone has one built in. It's decent.

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