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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)
Psalm 25:16 Turn to me and be gracious to me, for I am lonely and afflicted. Proverbs 18:2 A fool finds no satisfaction in trying to understand, for he would rather express his own opinion.
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
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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
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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?
The difference between fiction and reality is that fiction is supposed to make sense.
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
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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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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.
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FCBLComish
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December 28th, 2018 at 2:34:53 PM permalink
Quote: WangSanJose

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!



Let me handle the ones I know about:

Quote:

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 will have to pay California State Tax in all those situations.

Quote:


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?


Information is input into the computer, at a jackpot station, and printed up for the player. Unless you are talking about a very small operation, (like a California Card Room) where sometimes it is done by hand.
Quote:


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?


The person who pushes the button is the jackpot owner. All taxes are the responsibility of that person.

Quote:


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.)


Casinos don't like these situations. At one place where I worked, a big player hit a PROMOTIONAL jackpot with his wife's card inserted. They refused to pay him. If it were a regular jackpot, he would be on the hook for the taxes, regardless of whose card was inserted.

If you do not have proper ID and SS#, the jackpot will be awarded and then placed into safekeeping until the proper tax information is produced.


(Edited for formatting and readability. -bbb)
Last edited by: beachbumbabs on Dec 28, 2018
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billryan
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December 28th, 2018 at 3:12:09 PM permalink
In regards to #13, a well known video poker player with a radio show was playing with his wife's card when it was randomly selected for a big prize and after some hemming and a bit of hawing, he ended up getting paid.

I've seen payoffs go different ways. Was in AC when a friend hit for about $3,000 on a WOF and didn't have any id on him. They ended up letting a friend sign for it. Everyone I've talked to said they should not have, but they did.

I hit big at a dog track/casino and didn't have my wallet on me. They made me sign the back of the ticket and let me leave and return with my id.
The difference between fiction and reality is that fiction is supposed to make sense.
WangSanJose
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December 29th, 2018 at 7:15:05 PM permalink
Quote: FCBLComish


From what I've observed, the slot attendant checks the ID, the player's card, and ask for SSN before giving the jackpot in cash.
According to my friend at another casino, the slot attendant checks the ID, and ask for SSN, without checking the player's card.
When a jackpot is hit, do slot attendants know who's player's card is inserted, or the player didn't use a player's card before reaching the jackpot receiver?
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FCBLComish
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December 29th, 2018 at 7:21:07 PM permalink
Quote: WangSanJose

When a jackpot is hit, do slot attendants know who's player's card is inserted, or the player didn't use a player's card before reaching the jackpot receiver?



Yes. They know what card was inserted when the jackpot occurred. They also can do that for any spin.
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darkoz
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December 29th, 2018 at 8:47:35 PM permalink
Quote: WangSanJose

From what I've observed, the slot attendant checks the ID, the player's card, and ask for SSN before giving the jackpot in cash.
According to my friend at another casino, the slot attendant checks the ID, and ask for SSN, without checking the player's card.
When a jackpot is hit, do slot attendants know who's player's card is inserted, or the player didn't use a player's card before reaching the jackpot receiver?



They have the power to do it.

Whether they do or not is another story

Speaking from my knowledge of 5 different regions in the US I know of only one casino (literally one) that actually checks

I frequently use other people's cards and have won multiple jackpots with other cards inserted. Its usually not a problem. Just remove the card and dont mention it.

As for the casino where they do check I just remove the card and then when they asked if I used my card I state up front that I was playing unrated BUT some person had their card in the machine and just returned for it. I hadnt realized it was in the machine. That has never been a problem either
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BTLWI
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December 29th, 2018 at 10:48:17 PM permalink
Quote: 7craps

hopefully they stay away forever on that one and do not come back to you in another year wanting to see your records of losses adding up to $205,000. IF I was IRS, I would want to see your documents showing you lost $205,000 as most can not produce thatnot a very good assumption that IRS did understand it.

I have had 6 rounds over my lifetime with IRS and won them all.

They, each time, in writing, said they were right and I had to show proof I was right, making them wrong.
easy to do when you do have the proof as I did each time.
and they wanted the proof every time.
I am not a professional gambler according to the IRS rules and guidelines on that.

sounds like you fell into a crack
Enjoy the win!



I do this for a living. I have records.
sltploppy
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odiousgambitMichaelBluejaybeachbumbabs
January 3rd, 2019 at 2:01:06 AM permalink
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). Fortunately the state I live in (Michigan) does recognize Session Accounting as valid for purposes of calculating your gambling wins for State Income Tax purposes (they published a Revenue Procedure a few years ago discussing their stance on the validity). The big advantage comes in the following manner:

Hypothetically, let's say I have 30 W2G's for 2018 that were collected over the course of 20 separate sessions throughout the year for a grand total of $48,500 and most importantly I was a net loser for the year. Using non-session accounting I would enter each of those W2G's into my tax preparation software individually, which would then total them up to place on line 21, and then I enter my itemized deduction to offset that total. Since I am in one of the bad states for gambling this means I have $48,500 in additional income subject to state tax (Michigan does not allow a casual gambler to deduct losses). That means I would owe approximately $2,061 more in state income tax for ultimately being a net loser for the year.

Now let's take a look at using Session Accounting:

Over the 20 separate sessions of play for 2018, I had 5 winning sessions that totaled $16,000 and 15 sessions that resulted in a total loss of $20,000 (down 4k for the year). For State income tax purposes that means I have $16,000 (still cannot deduct my losing sessions) of additional income subject to state tax for a liability of approximately $680.

Using session accounting results in a net state income tax savings of $1,381. Overall there is no real change in my federal results (I do get dinged because if not for the gambling results I would not have itemized deductions) but the change in the state income tax results are material.

Everyone will have to make a determination of whether the possible flagging by the IRS is worth it but another possible benefit of session accounting can definitely be with your state income taxes.
Keyser
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January 3rd, 2019 at 9:39:17 AM permalink
Quote: Wizard

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.



Do you by chance have a link to his tax page?

Thanks! :)
Keyser
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January 3rd, 2019 at 12:30:01 PM permalink
Found it. https://easy.vegas/gambling/taxes
Last edited by: unnamed administrator on Sep 10, 2019
denstarr
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January 26th, 2019 at 9:37:20 AM permalink
Been in Vegas myself since 1991, and I've seen people do this. Not often, but I've seen it at least a half dozen times over the years.
100xOdds
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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
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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.
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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
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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://easy.vegas/gambling/taxes
Last edited by: MichaelBluejay on Aug 19, 2019
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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.
Last edited by: MichaelBluejay on Aug 19, 2019
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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?
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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.
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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
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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.
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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.
100xOdds
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May 1st, 2019 at 4:34:07 AM permalink
Quote: MichaelBluejay

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

found Google spreadsheet.
Just like Microsoft Excel.

But how likely is the IRS to accept it since it's electronic and you can easily change things?
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GWAE
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May 1st, 2019 at 4:38:22 AM permalink
Quote: 100xOdds

found Google spreadsheet.
Just like Microsoft Excel.

But how likely is the IRS to accept it since it's electronic and you can easily change things?



I have read they prefer hand written notes because of that fact. There are some apps that time stamp the info so you can tell when it was entered.

This is also the reason that techincally they want the table number or machine numbers along with names of employees that you encounter. The more info the better your chances on an audit.
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AcesAndEights
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May 1st, 2019 at 5:55:40 AM permalink
Quote: 100xOdds

which app do you guys recommend to record daily sessions?

or stick with a small pocket sized notebook?


A long time ago I toyed with the idea of developing a phone app that would make tracking your bankroll and session wins/losses easier. I posted about my idea on this forum a long time ago, but sadly nothing ever came of it (not enough hours in the day...).

I haven't done any current market research on this kind of app to see if anything exists now (it didn't seem to back in 2012). But a key feature of this proposed app would be generating a gambling journal to be used for tax records.
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GaryJKoehler
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May 1st, 2019 at 6:30:30 AM permalink
I think I can say this here, the Play Perfect VP apps (android and ios) all have a Trip Recorder feature.
100xOdds
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May 1st, 2019 at 8:37:52 AM permalink
Quote: GaryJKoehler

I think I can say this here, the Play Perfect VP apps (android and ios) all have a Trip Recorder feature.


But I also play table games, and live poker cash games.
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May 1st, 2019 at 11:11:09 AM permalink
You might try Easy Bankroll by Titanium Data. It's very basic, but it works quickly and you can do slots, table games, poker, others.
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AcesAndEights
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May 1st, 2019 at 11:17:51 AM permalink
Quote: beachbumbabs

You might try Easy Bankroll by Titanium Data. It's very basic, but it works quickly and you can do slots, table games, poker, others.


Oooh, thank you. From the screenshots, that looks very similar to what I was thinking about creating. I'll have to check it out.
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DRich
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May 1st, 2019 at 11:32:25 AM permalink
Quote: 100xOdds

.

But how likely is the IRS to accept it since it's electronic and you can easily change things?



I used to email the notes or spreadsheet to myself after updating it. that way you have a date/time stamp for every change.
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May 1st, 2019 at 2:56:01 PM permalink
Quote: MichaelBluejay

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



That is exactly what I do. Log sessions on Notes app, and then transfer them into an Excel spreadsheet.
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100xOdds
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May 4th, 2019 at 5:39:46 PM permalink
Quote: GWAE

I have read they prefer hand written notes because of that fact. There are some apps that time stamp the info so you can tell when it was entered.

This is also the reason that techincally they want the table number or machine numbers along with names of employees that you encounter. The more info the better your chances on an audit.

suggestion for these time stamp gambling apps?
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HexxusToldEm
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April 22nd, 2020 at 11:35:45 PM permalink
Hello, I found this discussion (as well as the information on Michael's site and others) while scouring the Internet for information about how to report my gambling wins and losses.

After pouring through all the info I could find, this is what I've gathered;

* The IRS has ruled that you should use sessions, but the IRS doesn't actually want you to use sessions, and will potentially come after you for using them.
* It's ok to use the notepad on your phone as a journal, but the IRS might not accept it, especially if they don't like the file creation date.
* The IRS proposed a safe harbor method for reporting gambling wins and losses, but they never approved it, but we should use it anyway, but the IRS might not accept it.
* Don't report W-2Gs if you're using the session method, even though the IRS wants them and will automatically flag you for not reporting them, and then might audit you.
* TurboTax software isn't designed to handle session reporting methods discussed, and TurboTax's "experts" can't agree on the correct way to actually do it electronically OR by paper.
* A tax preparer or CPA who is an expert on this can help, but will charge over $1,000, which is more than double what my previous tax preparer charged for my personal tax return (with Schedule C business income), and I might still get audited.
* Even if I use the session method, my taxes are going to go up even though I finished the year with a loss.
* The IRS phone advice reps don't know anything about session reporting; both of the agents I talked to referred me to the really basic "do I owe gambling money" tool they have online (which isn't very useful) AFTER I explained that I was trying to use the session method, and one of them was very rude and nasty to me the whole time and actually shouted "HEY!" and interrupted me while I was explaining my situation and why I was calling.
* A commentor on an accounting firm's advice page discussing how to use the session method without getting audited says he IS being audited for using the session method.

So, after all that, I ended up missing the tax deadline (because I filed for an extension and didn't realize this part would be such a problem until the night of the extension deadline) and now I'm wasting a lot of time making sure my journaled data is as accurate as possible (I kept a journal on my phone notepad and then moved the data into a spreadsheet), reviewing my receipts, and making sure I understand everything correctly so I can file late and move on to my 2019 taxes (where I won and lost even more),
and I'm getting the impression maybe I should just do it the way the IRS wants and report the W-2Gs, even though I'm going to end up paying more and it's actually less accurate.

Or maybe just stop gambling, I guess.

I guess I haven't really laid this out in a way where it's easy to reply to in any useful way, but, I suppose I just want to express that I've gotten the impression that this is not quite such a sure thing as it seems to be presented, I've been working on trying to get this particular portion of my taxes prepared correctly for months, I keep running into seeming contradictions and other hassles, and I wish I was done already.
Last edited by: HexxusToldEm on Apr 23, 2020
100xOdds
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April 23rd, 2020 at 1:11:15 AM permalink
i can see the IRS's point of view about electronic journal entry and how it can be faked.
yes, you can still fake it on a marble notebook but it's ALOT more work.

that being said, i use my phone's spreadsheet for journal entry.
since my w2-g's are less than $15k/yr, i'm not that worried about claiming the total loss amount from the journal.
Last edited by: 100xOdds on Apr 23, 2020
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MichaelBluejay
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April 23rd, 2020 at 1:16:05 AM permalink
HexxusToldEm, much of what you posted is inaccurate, and not at all what I say in my article. Going over each bullet point would take forever, so I'll comment on just one:

Quote: HexxusToldEm

Don't report W-2Gs if you're using the session method, even though the IRS wants them and will automatically flag you for not reporting them, and then might audit you.

No. It's absolutely not a given that you'll get flagged or audited for reporting sessions instead of the W-2G total. As I mentioned in my article, I received several thousand dollars worth of W-2Gs, reported no gambling income (because I had no winning sessions), didn't get flagged, and didn't get audited. And if I did get flagged, I expect that a simple letter would have cleared it up, as it's done every single time the IRS misunderstood something on either my personal or business return.

For all the details, I refer back to my article.

Yes, many/most IRS phone agents are unfamiliar with session reporting. Yes, sometimes people get flagged for using sessions instead of reporting the W-2G total. Yes, the system is wack and messed up, and you haven't even mentioned the unfairness of taxing gambling winnings in the first place. However, your doom and gloom summary as though there's nothing you can do, or that you will certainly be punished, is far from reality.
Last edited by: MichaelBluejay on Apr 23, 2020
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SOOPOO
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April 23rd, 2020 at 6:08:04 AM permalink
Welcome to the forum, Hexxus. The way gambler's are taxed in the USA is inherently unfair. The fair way would be to to assess your yearly take (essentially the entire year is a 'session'), and consider that the taxable income. If you do it professionally, then deduct reasonable expenses. If you do it casually, then since you are not able to take a deduction for years you lose, you should not be liable for taxes in years you win.
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By the way, you didn't mention what state you live in, but there are some states that essentially make it impossible to gamble for a living, tax wise, if you do it legally. There's already a thread about that somewhere
DRich
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April 23rd, 2020 at 7:23:39 AM permalink
My suggestion if you are using your phone notepad for a log is to email the log to yourself at least once a week (probably better if you emailed it everyday). By emailing it you are recording a date/timestamp that the IRS will most likely accept. That way they know you didn't do the whole thing the day before you file or your audit.
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100xOdds
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April 23rd, 2020 at 6:50:42 PM permalink
Quote: MichaelBluejay

For all the details, I refer back to my article.




wait.. that simple of a log?
my log is: date, casino, name of slot, slot ID #, $ in, $ out

and i do that for every slot i play.
i might have over a dozen entries for that day.
(my log is a spreadsheet on my phone.)
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HexxusToldEm
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April 23rd, 2020 at 9:03:36 PM permalink
Same here.

In fact, my Google Sheets spreadsheet on my phone tracks session $ in, session $ out, voucher in, voucher out, freeplay, noncash prizes, machine #, and some other stuff, as well as automatically calculating running totals and summaries of everything so I can keep track of how much I'm winning or losing and about how much I'll owe (although I'm still working on making sure the last thing is correct).

The year I'm stuck on though started out as a basic diary on my phone notepad (which I later put into a spreadsheet), which probably could have been done better.
I designed the spreadsheet later on.

I had some losses that I wasn't able to record because my phone died and I guess I have to just disregard them for tax purposes.
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April 24th, 2020 at 6:24:27 AM permalink
Quote: HexxusToldEm


I had some losses that I wasn't able to record because my phone died and I guess I have to just disregard them for tax purposes.



Not true! If you had wins instead of losses that day the IRS would not want you to disregard them I can assure you! I'm sure you can add a note... "Phone died April24, 2020. Lost $100 on Super Jiggly Ambassadors of the Universe Slot machine".
MichaelBluejay
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April 24th, 2020 at 11:30:46 AM permalink
Quote: 100xOdds

wait.. that simple of a log?

Like I keep saying, read the whole article for the details. You're quoting selectively.

I just edited the article to make it clearer that there are more details elsewhere about the diary format.
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MichaelBluejay
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April 24th, 2020 at 11:32:54 AM permalink
Quote: Hexxus

I had some losses that I wasn't able to record because my phone died...

Did your pencil and paper die, too?
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