Hullabaloo
Hullabaloo
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June 7th, 2019 at 2:41:43 PM permalink
When Ohio approved casino's they also changed their tax laws to allow deducting losses.

Money is always tight and our "representatives" love those funds so even though they may know it's stupid they'll do it anyway.

If you're in CA and want to fight it I'd suggest you give them a scenario such as this:

Quote:

I walk into a casino and there is a slot machine that costs $1,000 to play.

I put $1,000 in the machine, pull the lever and win the lowest amount, which is $1,000.

Do you really think it's equitable that you now want to tax me when I have had no increase from the amount I started with?



Then send it to your own rep, the person who's sponsoring the law, and every media outlet you can find.
DDB
DDB
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June 7th, 2019 at 6:55:44 PM permalink
Quote: Rigondeaux

I wonder how this works out in practice.

It stands to reason that a heavy gambler, even a winning one, never mind a losing one, simply wouldn't have the money.

Years ago, I remember reading that, by the letter of Ohio law, poker players were supposed to pay taxes on their winning sessions but not factor in their losing sessions. For some people, it seems like their tax liability might exceed their income under such a scheme. Of course, poker players can just lie, which such laws force them to do.

Even if it's not that extreme. Let's just say you're average to mild problem gambler makes 50k. Loses 15-20k. Hits 10-15k in taxables. (pulling these numbers out of my butt).

Is the state's plan to just start rounding these people up and jailing them when they don't have the money to pay the taxes? Then paying $50k/yr to icarcerate them? Great plan.



No, they won't haul them off to the slammer. What they will do is automatically deduct state taxes when a jackpot is hit. That is how Indiana does it - they automatically deduct 3.5% from all signers. And no, you can't deduct gambling losses on Indiana state taxes. That 3.5% is gone for good.
prozema
prozema
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June 7th, 2019 at 8:09:22 PM permalink
Quote: DDB

No, they won't haul them off to the slammer. What they will do is automatically deduct state taxes when a jackpot is hit. That is how Indiana does it - they automatically deduct 3.5% from all signers. And no, you can't deduct gambling losses on Indiana state taxes. That 3.5% is gone for good.



Missouri takes their cut of my taxable jackpots without asking as well. It's basically a free roll for the state.
He who makes the laws gets the good end of the deal.
Imagine that.
:-/
gordonm888
gordonm888
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June 8th, 2019 at 8:00:26 AM permalink
Politicians are capable of saying some really stupid things when it is to their benefit.

This practice of taxing winning wagers and not allowing an offset for losing wagers is going to drive gamblers away from those kind of activities.
So many better men, a few of them friends, were dead. And a thousand thousand slimy things lived on, and so did I.
MDawg
MDawg
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June 15th, 2019 at 9:02:37 PM permalink
In both corporate and personal returns, California basically disallows a lot of loss deductions that are allowed at the federal level. This has been going on for a while.

For example say you have a NOL (net operating loss) carryforward in your corporation, meaning, corporate income losses from the past that you are carrying forward to deduct against future corporate income. This year, you have income in your corp. The NOL carryforward exceeds the income. At the federal level, no problem, you may deduct all of the NOL against the income, and you pay 0 tax. But at the state level not only must you pay the 800 minimum corporate tax to the state of CA, but also you must pay income tax on the income because the state disallows the full NOL deduction. The state of CA (the Franchise Tax Board) needs the revenue too badly so they have suspended allowing the full NOL deduction against all corporate income for a while now.
Last edited by: MDawg on Jun 15, 2019
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
Indy70
Indy70
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beachbumbabsbobbartop
June 16th, 2019 at 4:36:35 PM permalink
Quote: Hullabaloo

When Ohio approved casino's they also changed their tax laws to allow deducting losses.

Money is always tight and our "representatives" love those funds so even though they may know it's stupid they'll do it anyway.

If you're in CA and want to fight it I'd suggest you give them a scenario such as this:



Then send it to your own rep, the person who's sponsoring the law, and every media outlet you can find.



I believe this is incorrect, in Ohio you have to use AGI from federal. No deductions for losses. Also each city that the casino is registered in gets their cut of taxes on all jackpots. No recourse.

When Ohio legalized casino gambling in 2010, they also added a deduction for gambling losses effective January 1, 2013. Taxdood reported that the new budget signed into law repeals this deduction. He believes itís retroactive; I can confirm that it is retroactive. This is bad news for amateur Ohio gamblers, but will have no impact for professional gamblers; professional gamblers can take gambling losses (up to the amount of their winnings) on their Schedule C.

Here is the list of bad states for gamblers with the reasons why:

Connecticut [1]
Hawaii [2]
Illinois [1]
Indiana [1]
Massachusetts [1]
Michigan [1]
Minnesota [3]
Mississippi [4]
New York [5]
Ohio [1] [6]
Washington [7]
West Virginia [1]
Wisconsin [1]

NOTES:

1. CT, IL, IN, MA, MI, OH, WV, and WI do not allow gambling losses as an itemized deduction. These statesí income taxes are written so that taxpayers pay based (generally) on their federal Adjusted Gross Income (AGI). AGI includes gambling winnings but does not include gambling losses. Thus, a taxpayer who has (say) $100,000 of gambling winnings and $100,000 of gambling losses will owe state income tax on the phantom gambling winnings. (Michigan does exempt the first $300 of gambling winnings from state income tax.)

2. Hawaii has an excise tax (the General Excise and Use Tax) thatís thought of as a sales tax. It is, but it is also a tax on various professions. A professional gambler is subject to this 4% tax (an amateur gambler is not).

3. Minnesotaís state Alternative Minimum Tax (AMT) negatively impacts amateur gamblers. Because of the design of the Minnesota AMT, amateur gamblers with significant losses effectively cannot deduct those losses.

4. Mississippi only allows Mississippi gambling losses as an itemized deduction.

5. New York has a limitation on itemized deductions. If your AGI is over $500,000, you lose 50% of your itemized deductions (including gambling losses). You begin to lose itemized deductions at an AGI of $100,000.

6. Ohio currently does not allow gambling losses as an itemized deduction. However, effective January 1, 2013, gambling losses will be allowed as a deduction on state income tax returns. Unfortunately, those gambling losses will not be deductible on city or school district income tax returns, so Ohio will remain a bad state for amateur gamblers. Because of the rescinding of the law allowing gambling losses as a deduction, Ohioans cannot deduct gambling losses on their state, city, or school district returns.

7. Washington state has no state income tax. However, the state does have a Business & Occupations Tax (B&O Tax). The B&O Tax has not been applied toward professional gamblers, but my reading of the law says that it could be at any time.
beachbumbabs
Administrator
beachbumbabs
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bobbartop
June 16th, 2019 at 6:36:22 PM permalink
Quote: Indy70

I believe this is incorrect, in Ohio you have to use AGI from federal. No deductions for losses. Also each city that the casino is registered in gets their cut of taxes on all jackpots. No recourse.

When Ohio legalized casino gambling in 2010, they also added a deduction for gambling losses effective January 1, 2013. Taxdood reported that the new budget signed into law repeals this deduction. He believes itís retroactive; I can confirm that it is retroactive. This is bad news for amateur Ohio gamblers, but will have no impact for professional gamblers; professional gamblers can take gambling losses (up to the amount of their winnings) on their Schedule C.

Here is the list of bad states for gamblers with the reasons why:

Connecticut [1]
Hawaii [2]
Illinois [1]
Indiana [1]
Massachusetts [1]
Michigan [1]
Minnesota [3]
Mississippi [4]
New York [5]
Ohio [1] [6]
Washington [7]
West Virginia [1]
Wisconsin [1]

NOTES:

1. CT, IL, IN, MA, MI, OH, WV, and WI do not allow gambling losses as an itemized deduction. These statesí income taxes are written so that taxpayers pay based (generally) on their federal Adjusted Gross Income (AGI). AGI includes gambling winnings but does not include gambling losses. Thus, a taxpayer who has (say) $100,000 of gambling winnings and $100,000 of gambling losses will owe state income tax on the phantom gambling winnings. (Michigan does exempt the first $300 of gambling winnings from state income tax.)

2. Hawaii has an excise tax (the General Excise and Use Tax) thatís thought of as a sales tax. It is, but it is also a tax on various professions. A professional gambler is subject to this 4% tax (an amateur gambler is not).

3. Minnesotaís state Alternative Minimum Tax (AMT) negatively impacts amateur gamblers. Because of the design of the Minnesota AMT, amateur gamblers with significant losses effectively cannot deduct those losses.

4. Mississippi only allows Mississippi gambling losses as an itemized deduction.

5. New York has a limitation on itemized deductions. If your AGI is over $500,000, you lose 50% of your itemized deductions (including gambling losses). You begin to lose itemized deductions at an AGI of $100,000.

6. Ohio currently does not allow gambling losses as an itemized deduction. However, effective January 1, 2013, gambling losses will be allowed as a deduction on state income tax returns. Unfortunately, those gambling losses will not be deductible on city or school district income tax returns, so Ohio will remain a bad state for amateur gamblers. Because of the rescinding of the law allowing gambling losses as a deduction, Ohioans cannot deduct gambling losses on their state, city, or school district returns.

7. Washington state has no state income tax. However, the state does have a Business & Occupations Tax (B&O Tax). The B&O Tax has not been applied toward professional gamblers, but my reading of the law says that it could be at any time.



Great post! Assuming this is accurate (and I've no reason to think it's not), this should really be an article or otherwise saved, not the end of a thread that will fall off the grid sometime soon.
If the House lost every hand, they wouldn't deal the game.
bobbartop
bobbartop
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June 16th, 2019 at 7:23:09 PM permalink
Quote: beachbumbabs



Great post! Assuming this is accurate (and I've no reason to think it's not), this should really be an article or otherwise saved, not the end of a thread that will fall off the grid sometime soon.




I was thinking the same thing and was about to save his post to my hard drive. Excellent post, thank you to Indy70,
'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.
ChumpChange
ChumpChange
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June 17th, 2019 at 12:41:03 AM permalink
All you have to do is finish your session a winner, and don't sign any tax forms.
prozema
prozema
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June 23rd, 2019 at 9:35:34 PM permalink
Quote: Indy70


2. Hawaii has an excise tax (the General Excise and Use Tax) thatís thought of as a sales tax. It is, but it is also a tax on various professions. A professional gambler is subject to this 4% tax (an amateur gambler is not).



I thought all gambling was illegal in Hawaii?
Seems odd to tax something that's not legal.

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