Question about taxes?
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Quote: StarburgerI won $500 in a Casino Cash Giveaway game. The first level was $100 in free play, the second level was $200 in free play, the third level was $300 in free play, and the fourth level, which I won was $500 in cash. It would have been $1,000, but someone else also won so the cash prize was split. They took my Player's Club Information and my ID info and made a copy of it. They had me file paperwork and sign documents swearing that the SSN I provided was mine since I don't have a SSN card on me. They informed me that all of this and the $500 will be give to the IRS for my tax information for 2020. Since the cash was under $1200, will I have to pay any taxes on this $500 win?
Yes, they will issue you a 1099 that needs to be reported on your taxes. Every dollar you win is taxable even under $1200. The $1200 number is when the casino will report a single slot machine win but you are supposed to report every dollar. Most casinos only report other winning when they exceed $600. At $600 they must file a 1099.
Quote: DeucekiesI'm guessing you won $100 or more in a previous giveaway this year, so this $500 put you over the $600 threshold.
Many companies will send a 1099 for less than $600. The IRS requires them to send one at $600 but many companies will send them for any amount they give away. Once again, all income is taxable even if you don't get a tax form.
everything you win in a casino MUST be reported on your tax return. One does NOT need to have any casino given form to do just that.Quote: StarburgerSince the cash was under $1200, will I have to pay any taxes on this $500 win?
IF you do not report ALL income, you are cheating the system (Cheaters R lozers)
and you will pay for that sooner or later.
most scoff at that, they are followers (they just regurgitate) and are NOT leaders.
IRS wants you to report exactly what you won and have it properly documented.
Quote: 7crapseverything you win in a casino MUST be reported on your tax return. One does NOT need to have any casino given form to do just that.
IF you do not report ALL income, you are cheating the system (Cheaters R lozers)
and you will pay for that sooner or later.
most scoff at that, they are followers (they just regurgitate) and are NOT leaders.
IRS wants you to report exactly what you won and have it properly documented.
^ this poster, while correct, forgot to mention that you can deduct losses against your win. You need to keep some records, though, in case you get audited.
One might be able to deduct losses but it is not 100% a certainty.Quote: rsactuary^ this poster, while correct, forgot to mention that you can deduct losses against your win. You need to keep some records, though, in case you get audited.
Many factors come into play.
one should follow ALL IRS rules (sure, may be hard to find and understand them all) in
regards to gambling wins and losses and sessions and such.
IRS wants some (if not all, imo) of your gambling/casino wins.
They really do not care about your losses unless you claim and document them with an approved IRS method.
Good luck
Quote: beachbumbabsJust speculation, but if the top prize had been the $500 you actually won, I'd be surprised if they made you do the paperwork. Guessing that the boothlings had instructions on doing the forms for the 1k, and when you split it, they did it anyway. Maybe you saw them do that to the lower amount winners, too. But I bet it was just you and the other person.
I had to do paperwork because I had never won any money from them in a giveaway Game before.
By Jaci Conrad Pearson - Black Hills Pioneer - Dec 19, 2014
https://www.bhpioneer.com/local_news/supreme-court-casino-free-play-not-taxable/article_5584b698-87a5-11e4-8051-6b7e6045ba34.html
Is Free Play Considered Taxable Income? - 07-02-2016
http://slotfanatics.com/showthread.php?18785-Is-Free-Play-Considered-Taxable-Income
kdk wrote: It is not taxed. I have won a few drawings at one of my local casinos. Once it was $1000 in cash- and they gave me a tax form with it. Then won there again and instead my prize was $1000 in freeplay. No tax form for that. For any drawings/prizes anything over $600 cash is taxable. Winnings from the freeplay are taxable of course though.
pelotari wrote: I will confirm what kdk said, and I have had similar wins. I was called in a drawing where there were several winners of $1000 cash. Each of us collected at the cashier, and were given a 1099 tax form (not a W2G) and a copy was sent to the IRS. It was a 1099 since it was a drawing that had no fee to enter, as opposed to a slot win. Then another time I was called in a drawing and won $10,000 freeplay. There were no tax forms on that.
Quote: ChumpChangeSouth Dakota Supreme Court: Casino free play not taxable
By Jaci Conrad Pearson - Black Hills Pioneer - Dec 19, 2014
https://www.bhpioneer.com/local_news/supreme-court-casino-free-play-not-taxable/article_5584b698-87a5-11e4-8051-6b7e6045ba34.html
Is Free Play Considered Taxable Income? - 07-02-2016
http://slotfanatics.com/showthread.php?18785-Is-Free-Play-Considered-Taxable-Income
kdk wrote: It is not taxed. I have won a few drawings at one of my local casinos. Once it was $1000 in cash- and they gave me a tax form with it. Then won there again and instead my prize was $1000 in freeplay. No tax form for that. For any drawings/prizes anything over $600 cash is taxable. Winnings from the freeplay are taxable of course though.
pelotari wrote: I will confirm what kdk said, and I have had similar wins. I was called in a drawing where there were several winners of $1000 cash. Each of us collected at the cashier, and were given a 1099 tax form (not a W2G) and a copy was sent to the IRS. It was a 1099 since it was a drawing that had no fee to enter, as opposed to a slot win. Then another time I was called in a drawing and won $10,000 freeplay. There were no tax forms on that.
The confusion is that there are two types of Freeplay but they appear identical.
Gifted or won freeplay is taxable
New membership offers although the amounts generally too small to generate tax forms.
Freeplay from drawings etc is taxable.
Freeplay earned by gambling does not count as Income to the IRS. That is a cost rebate similar to free hotel rooms for your play. Amounts don't matter (a person with a $50 Theo may get free rooms several days a month that exceed his losses. Still not taxable. It falls under a discount or rebate)
Quote: ChumpChangeFor any drawings/prizes anything over $600 cash is taxable.
Not true. Every dollar won is taxable but winnings over $600 cumulative over the year get issued a 1099.
Alternatively, I'm assuming points on a card can be converted to free play and those never generate a tax form.
If I get $675 in free play in a mailer, that won't generate a tax form either?
Quote: ChumpChangeSo if I win 3 drawings on 3 different days for $250 in free play at the same casino, they whip out the 1099 on the third one because the cumulative goes to over $600?
The casinos that I worked at would just send it at the end of the year.
Quote: ChumpChangeSo if I win 3 drawings on 3 different days for $250 in free play at the same casino, they whip out the 1099 on the third one because the cumulative goes to over $600?
Alternatively, I'm assuming points on a card can be converted to free play and those never generate a tax form.
If I get $675 in free play in a mailer, that won't generate a tax form either?
See my answer above
Since when is free play taxable?
Quote: AlanMendelsonSince when are rebates taxable?
Since when is free play taxable?
Not a tax expert, but some rebates have been taxable for a long time. My parents bought a car in 1976 that came with a $500 rebate that was considered income and was taxable. A few years later, their next car came with a rebate but wasn't taxable.
My understanding is that free play isn't taxable, but the winnings from free play are.
Quote: AlanMendelsonSince when are rebates taxable?
Since when is free play taxable?
The IRS distinguishes between freeplay earned as a rebate (mailers) and Freeplay given without a purchase (new membership offers, gift and prize drawings)
These fall under the exact same rules as with bank cash rebates and gifts.
There was a banking offer of several hundred dollars deposited upon opening accounts with certain minimums years ago. Those deposits were considered gifts for opening accounts and taxable (many patrons were surprised when they found out later
Otoh, cashback delivered into your account from say a discover card or other card is NOT TAXABLE as that is considered a rebate on purchases made.
You can withdraw the money from these rebates on your discover card without paying taxes (otherwise it would be a joke to say it's only taxable if you withdraw it).
Likewise Freeplay based on prior play is not taxable EVEN THE WINNING AMOUNT AFTER IT'S PLAYED for the same reason as cashback rebates
I'd probably put half of that down at the cage as front money and come back another day and pick it up so there's no CTR.
Quote: ChumpChangeSo I could get $100 freeplay from points on my card, use that and win a $10,000 jackpot and because it was during a free play session, there will be no attendent called offering a tax form? Hope the TITO can handle 5 digits.
I'd probably put half of that down at the cage as front money and come back another day and pick it up so there's no CTR.
You would get a tax form, of course.
In theory you should be able to claim it as a rebate from freeplay.
In actuality, you would probably be denied and have to fight it in tax court.
Here is a question:
You buy a sofa at 50% off from a department store. The manufacturer has a special where you can send on the receipt and get a second sofa free. The department store then runs a special where you can pick up a second sofa free when purchasing a new one with that earlier receipt (which qualifies you for another free sofa from the manufacturer)
By the time you get done you have made a profit on sofas
Taxable?
Nope. Profit or no profit it's all sales rebates predicated on purchases.
Now do tires. I'm at 4/32nds of tread.
Quote: darkoz
Likewise Freeplay based on prior play is not taxable EVEN THE WINNING AMOUNT AFTER IT'S PLAYED for the same reason as cashback rebates
I have hit more than one jackpot on freeplay over the years. Each time I received a w2g and it was reported to the irs. While I don't doubt you i think taking the time to prove it to an auditor that I hit it on freeplay play would be difficult. The only way i know I hit it on free play was I have the freeplay window open when I took a picture. I just don't think it is worth the aggravation to fight it if audited.
Quote: cmlotito
Quote: darkoz
Likewise Freeplay based on prior play is not taxable EVEN THE WINNING AMOUNT AFTER IT'S PLAYED for the same reason as cashback rebates
I have hit more than one jackpot on freeplay over the years. Each time I received a w2g and it was reported to the irs. While I don't doubt you i think taking the time to prove it to an auditor that I hit it on freeplay play would be difficult. The only way i know I hit it on free play was I have the freeplay window open when I took a picture. I just don't think it is worth the aggravation to fight it if audited.
I agree.
I personally just pay taxes on JACKPOTS won with freeplay. It's not worth the argument. (especially if it's when I am using another player's card lol.
[EDIT by mod: OnceDear: Trying to fix quote tags]
Quote: cmlotitoThat's weird. Its displaying my response as a quote. That's what I get for using my phone instead of computer.
Edit your post.
The format quote is at the top of your post. Copy it to the bottom and delete the part that is wrong at the top
I thought all casino free play was a tax free rebate on losses.
Casino free play is like car rebates -- a tax free price reduction.
I never got a 1099 for a toaster from opening a bank account.
If a casino sent me a 1099 for free play it meant the casino was trying to take a business deduction on the free play it handed out. I'd avoid that casino.
Free play has no value. If you tax it, you tax zero.
If I opened a players card account and won a car then yes I'd expect a 1099. But if I won free play, the free play is worth zero. If I won cash I'd also expect a 1099.
Quote: AlanMendelsonJust a bunch of thoughts:
I thought all casino free play was a tax free rebate on losses.
Casino free play is like car rebates -- a tax free price reduction.
I never got a 1099 for a toaster from opening a bank account.
If a casino sent me a 1099 for free play it meant the casino was trying to take a business deduction on the free play it handed out. I'd avoid that casino.
Free play has no value. If you tax it, you tax zero.
If I opened a players card account and won a car then yes I'd expect a 1099. But if I won free play, the free play is worth zero. If I won cash I'd also expect a 1099.
A toaster isn't worth over $600.
If you joined a casino as a new membership and got over $600 that would be taxable.
However if the new membership is dependent on a purchase (ex. Get $1000 freeplay as a new member after earning xxx points gambling same day) then it's not taxable as it's a rebate.
Freeplay has no value but it turns into cash. The cash is still the rebate. Otherwise what's the point? Just like cashback from a credit card isn't cash till you withdraw it. Still not taxable
Quote: darkozA toaster isn't worth over $600.
If you joined a casino as a new membership and got over $600 that would be taxable.
However if the new membership is dependent on a purchase (ex. Get $1000 freeplay as a new member after earning xxx points gambling same day) then it's not taxable as it's a rebate.
Freeplay has no value but it turns into cash. The cash is still the rebate. Otherwise what's the point? Just like cashback from a credit card isn't cash till you withdraw it. Still not taxable
Are you saying that if I am playing my freeplay and get a dealt Royal on a $1 hundred play, it is not a taxable event?
Quote: billryanAre you saying that if I am playing my freeplay and get a dealt Royal on a $1 hundred play, it is not a taxable event?
I answered that question above
Quote: billryanAre you saying that if I am playing my freeplay and get a dealt Royal on a $1 hundred play, it is not a taxable event?
Of course it is.
Quote: DRichOf course it is.
Not according to IRS rules.
But those rules don't mention JACKPOTS.
They simply say rebates are not taxable. And Freeplay is considered a rebate if it's based on past performance.
Now it probably would be challenged and would need to go to tax court.
You might win in court but most likely any aspect of the law found to be malleable will be used to make you lose.
You better have a good tax attorney.
Quote: darkozNot according to IRS rules.
But those rules don't mention JACKPOTS.
They simply say rebates are not taxable. And Freeplay is considered a rebate if it's based on past performance.
Now it probably would be challenged and would need to go to tax court.
You might win in court but most likely any aspect of the law found to be malleable will be used to make you lose.
You better have a good tax attorney.
Money won off of a rebate isn't a rebate. It is taxable.
Quote: DRichMoney won off of a rebate isn't a rebate. It is taxable.
https://www.irs.gov/publications/p525#en_US_2019_publink1000229502
Quote: darkozI answered that question above
As I read your responses, one seems to contradict the other.
Quote: darkozhttps://www.irs.gov/publications/p525#en_US_2019_publink1000229502
Exactly, gambling winnings are taxable.
Quote: DRichExactly, gambling winnings are taxable.
You must be reading something different about cash rebates than I am
