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MichaelBluejay
MichaelBluejay
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December 14th, 2018 at 3:00:02 AM permalink
Quote: TomG

If a blackjack player did just report their entire year of blackjack winnings as one single integer and not itemized, what could the IRS possibly do to correct the error?

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.

If you reported the net profit as income instead of a single figure for wins and a single figure for losses, then you file a 1040X to amend your return.

Quote: Wiz Baby

In my 17 years living Vegas and 32 in and out of casinos, the number of times I've seen somebody step away from a gambling table and write in a journal something, presumably his win/loss, casino, table number, companions, and time of day, is zero.

I believe you. For starters, most people have no clue that they're supposed to, as this thread has proved. But even if they knew, most people probably wouldn't comply, because most wins are untraceable and the recordkeeping requirement is onerous. Personally, I use the Notes app on my phone, takes just a few seconds. By the way, the table # or slot machine # isn't a hard-and-fast requirement. The IRS lists what info should be included "at a minimum" and the table #/slot# isn't part of that. There's a subsequent section where they list other information that can be recorded, including table # and slot #, though that info is identified neither as "optional" nor "required".

Anyway, based on this discussion, I added a numbered summary of main points at the beginning of the article. The article is way more useful now. However good my content might be, it's that way because of reader feedback, which is invaluable.
Last edited by: MichaelBluejay on Sep 10, 2019
Ace2
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December 14th, 2018 at 3:51:34 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?.

”US persons”, which includes more than just US citizens, must report all worldwide income, period. If you are in Egypt on vacation and find an artifact in the sand worth a million bucks, you report it.

You can attempt to renounce US citizenship but that does not mean you will be allowed to, And even if you are allowed you will probably have to pay a hefty exit tax, and still no guarantee of being fully released from US tax obligations.

With that said, when I compare myself to European colleagues making similar salaries, I have a sh*tload more disposable income then they do. I’m amazed at some of the guys in the UK that basically live paycheck to paycheck despite earning decent salaries. Everything is double the price there, partially because the tax load on everything you buy is much higher.

I’ll bet you’ll pay more in tax on gasoline/“petrol” in one year than I’ll pay in my life on gambling winnings.
Last edited by: Ace2 on Dec 14, 2018
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AcesAndEights
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MichaelBluejayLottoballsMinty
December 14th, 2018 at 5:44:32 AM permalink
Quote: Wizard

Well, how should I put this? In my 17 years living Vegas and 32 in and out of casinos, the number of times I've seen somebody step away from a gambling table and write in a journal something, presumably his win/loss, casino, table number, companions, and time of day, is zero. However, I don't dispute what you site as the law.

The two of us exempted from this statement -- let the record say.


Respectfully, I do this every time I gamble. But I don't use a paper journal like a luddite, I enter it into a notes app on my phone.

The table numbers get a little iffy sometimes, since I usually wait until I'm at least a little bit away from the table to not raise any suspicions. Of course, there shouldn't be anything suspicious about someone keeping detailed win/loss records, but you know how pit bosses are.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
DRich
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December 14th, 2018 at 7:09:19 AM permalink
Quote: AcesAndEights

Respectfully, I do this every time I gamble. But I don't use a paper journal like a luddite, I enter it into a notes app on my phone.

The table numbers get a little iffy sometimes, since I usually wait until I'm at least a little bit away from the table to not raise any suspicions. Of course, there shouldn't be anything suspicious about someone keeping detailed win/loss records, but you know how pit bosses are.



I do not write down the table or machine number. I also use my phone notes and just write the date time, casino, game played (ie. BJ or Video Poker) and my net result.
Living longer does not always infer +EV
ChumpChange
ChumpChange
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December 14th, 2018 at 10:50:04 AM permalink
Typical month at blackjack tables?
10 days I win $5000 a day.
10 days I lose $5000 a day.
My AGI is jumped $50K, and my bookkeeping drags me back to no winning at all.
Wizard
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December 14th, 2018 at 10:53:56 AM permalink
Quote: AcesAndEights

Respectfully, I do this every time I gamble.



Duly noted. I apologize for inferring nobody doing their due diligence to keep proper records.
It's not whether you win or lose; it's whether or not you had a good bet.
Wizard
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December 14th, 2018 at 11:02:02 AM permalink
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?
It's not whether you win or lose; it's whether or not you had a good bet.
GWAE
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odiousgambit
December 14th, 2018 at 11:29:05 AM 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?



That is exactly right. That happened to me 8 years ago at much smaller amounts. I had a w2g for 4k. Had a gross of $0. My agi went from something like 38k to 42k for a family of 4. Nunbers are off, canr remember the exact. I not only had to pay taxes on that 4 k, but it put me over the threshold for the poor person credit and I lost the credit.

I did my taxes without the w2g and refund was something like $4600 and when I added the w2g on my refund went down to $3100. Again numbers are not exact but close.
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odiousgambit
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December 14th, 2018 at 11:55:02 AM permalink
Quote: GWAE

I did my taxes without the w2g and refund was something like $4600 and when I added the w2g on my refund went down to $3100.

I remember you mentioning this before, and it was a matter of the IRS contacting you after you filed and saying "where's the W2g pal?" They didn't say "oh I guess during that session he must have lost as much as he won, after all the W2g is meaningless and should be abolished" It may be that you could have responded that you won as much as you lost in the session where you won the W2g, and the truth is at the very least that you lost quite a bit vis a vis that damnable thing [I'd bet], but the hassle of making that response would be beyond belief. And you probably didn't keep a diary.

Can you confirm the IRS contacted you, am I remembering right?
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
GWAE
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December 14th, 2018 at 12:01:39 PM permalink
Quote: odiousgambit

I remember you mentioning this before, and it was a matter of the IRS contacting you and saying "where's the W2g pal?" They didn't say "oh I guess during that session he must have lost as much as he won, after all the W2g is meaningless and should be abolished" It may be that you could have responded that you won as much as you lost in the session where you won the W2g, and the truth is at the very least that you at least lost quite a bit vis a vis that damnable thing [I'd bet], but the hassle of making that response would be beyond belief. And you probably didn't keep a diary.

Can you confirm the IRS contacted you, am I remembering right?



Wow your memory is better than mine. I forgot all about that. Yes I ended up filing and not including the w2g and got a nice little letter about a year later saying hey numb nuts, you didn't include your w2g, you owe us 1500 plus interest. I cant remember if I refilled or just sent them the money. I think I just sent them the money since I knew it was correct.
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