Easy way to keep a gambling log?
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.
https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
So just when do you owe more than $1,000 in taxes anyway? At the end of every 3rd month?
Quote: ChumpChangeWho Must Pay Estimated Tax
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.
https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
So just when do you owe more than $1,000 in taxes anyway? At the end of every 3rd month?
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My Mom owed the Federal government almost $3,000 one year for some reason and for the next couple of years she had to file quarterly, and paid a small penalty for not paying quarterly the one year.
I filed quarterly for years but that was all taken care of.
Quote: Gandler
This year I actually got a similar letter, and I was annoyed/confused at first (because I am very careful now), but it turns out I overpaid, by 1.00 USD exactly when sending payment with my Tax Return, so I received one of those nice U.S. Treasury checks for a whole dollar, it was a nice surprise (still not sure how I overpaid by exactly one dollar, but its better than owing a dollar).
Many years ago I received an IRS refund of exactly $1. About five years after that I went into the IRS building to get a copy of my income statement (it includes all W2G's, 1099's, and W2's that were reported to the IRS). My number was called and I went to the desk and sat down. The IRS employee sits down and immediately says that "we have been looking for you". Not something you want to hear from the IRS. As shivers went down my spine they explained that I received a refund check many years ago that I did not cash and they wanted me to cash it to help balance their books. I told the agent that I must have misplaced it and he said he would cut me a new check. After about 20 minutes he comes back and presents me with a $1 check and asks me to promptly deposit it. I deposited it this time because I did not want the IRS "actively looking for me".
Quote: ChumpChange
So just when do you owe more than $1,000 in taxes anyway? At the end of every 3rd month?
Almost every single year in my case. I would usually be happy if I only owed $1000.
In year 2, he worked more for the second job and less for the first so he owed the IRS a bit at the end of the year.
In year 3, he stopped working for his first job and went to work full-time for company 2, but never changed the form so they continued not to take taxes out of his salary. About eight months into his full-time employment, he is summoned to HR and asked to prove that he has 12 dependents. When he explains why he claimed that, he is told he broke the law by falsely claiming them and his action has opened the company to all sorts of tax problems. He was terminated, not given his accrued benefits, and ended up in a nasty legal battle that lasted years, cost him a small fortune in lawyers, and got hit with penalties from the IRS.
He went from making $250,000 and having a wife, kids, and a house to living on top of a bar and driving a cab as his business was very insular and he claimed he'd been blackballed.
It's illegal?!Quote: billryanI had a friend who had a regular job where taxes were withheld as most jobs do. He took on a second job and since he normally got a refund from overpaying on his first job he wrote down he had 12 dependents so they withheld almost nothing. Everything went great the first year because the amount withheld from Job 1 more than made up for what he earned in his part-time job.
In year 2, he worked more for the second job and less for the first so he owed the IRS a bit at the end of the year.
In year 3, he stopped working for his first job and went to work full-time for company 2, but never changed the form so they continued not to take taxes out of his salary. About eight months into his full-time employment, he is summoned to HR and asked to prove that he has 12 dependents.
When he explains why he claimed that, he is told he broke the law by falsely claiming them and his action has opened the company to all sorts of tax problems. He was terminated, not given his accrued benefits, and ended up in a nasty legal battle that lasted years, cost him a small fortune in lawyers, and got hit with penalties from the IRS.
He went from making $250,000 and having a wife, kids, and a house to living on top of a bar and driving a cab as his business was very insular and he claimed he'd been blackballed.
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I don't have children yet claimed 4 for withholding so i am around breakeven in what I owe to IRS at tax time.
I worked for a major law firm at that time.
No one questioned it.
Also, how is this relevant to the thread topic of Gambling logs and gambling audits by IRS?
Quote: 100xOddsIt's illegal?!Quote: billryanI had a friend who had a regular job where taxes were withheld as most jobs do. He took on a second job and since he normally got a refund from overpaying on his first job he wrote down he had 12 dependents so they withheld almost nothing. Everything went great the first year because the amount withheld from Job 1 more than made up for what he earned in his part-time job.
In year 2, he worked more for the second job and less for the first so he owed the IRS a bit at the end of the year.
In year 3, he stopped working for his first job and went to work full-time for company 2, but never changed the form so they continued not to take taxes out of his salary. About eight months into his full-time employment, he is summoned to HR and asked to prove that he has 12 dependents.
When he explains why he claimed that, he is told he broke the law by falsely claiming them and his action has opened the company to all sorts of tax problems. He was terminated, not given his accrued benefits, and ended up in a nasty legal battle that lasted years, cost him a small fortune in lawyers, and got hit with penalties from the IRS.
He went from making $250,000 and having a wife, kids, and a house to living on top of a bar and driving a cab as his business was very insular and he claimed he'd been blackballed.
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I don't have children yet claimed 4 for withholding so i am around breakeven in what I owe to IRS at tax time.
I worked for a major law firm at that time.
No one questioned it.
Also, how is this relevant to the thread topic of Gambling logs and gambling audits by IRS?
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It is illegal, under federal law, to claim more exemptions than you are legally entitled to, and it is illegal to use extra exemptions to withhold less taxes than you will end up owing. The law calls for $500 fines for misrepresenting the number of exemptions one is entitled to, and falsely signing your name to a federal document is also a misdemeanor.
Quote: DRichI always claim 0 dependents so they withhold a little more because it seems that I owe every year.
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You can withhold more taxes, but not fewer taxes. Section 5 of the previous form clearly states that you are attesting, under penalty of federal perjury law, that you filled out the form truthfully.
Your employer has an obligation to see it's employees fill these out properly, to the best of their knowledge. If a business fails to withhold the proper taxes on an individual and the Feds can't track down the person, the company can be responsible for paying the taxes. This is rarely enforced and is usually done in criminal cases where the business paid everyone in cash with no effort to collect taxes, but it is a Big Stick that can be held over a business. The IRS can enroll people in its Tax Compliance Program that makes the business jump thru hoops to make sure a specific employee pays his taxes. The IRS can also punish people who have abused the allowances in the past by locking them down. That means anyone who puts your SS into their payroll is required to withhold your taxes at zero allowances and file paperwork every quarter or so. It's a pain in the ass and it is easier for small employers to simply not hire people in that situation.
When I was in college, everyone said to claim ten allowances, and we used to do this for many of our part-timers as they almost all were students but sometime in the late 90s, our accountants put a stop to it.
I believed there is a new form for 2022 that simplifies the situation but I'm talking about the former forms.
In the 1990s, my clubs switched to hiring mostly thru an agency where we paid them a fee and they did everything else. I thought it was a great system but most clubs seem to have gone back to the old system.
Quote: ChumpChangeAnd the temp agencies told their workers to take extra exemptions too, uh-huh.
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Using the temp agency saved us a small fortune and also gave our workers access to group health insurance that we, as a small business, never could have gotten pre-Obama care.
Quote: Hunterhill
I do file as a professional gambler, but that is my sole source of income other than investments.
From what I understand you attract more attention and likely audit if you file as a professional and you also have another occupation.
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It is my understanding, from other posts I’ve read, that they simply don’t allow it. I’m referring to filing as a pro gambler when you have any other earned income (assuming from wages, tips, salary, etc.; as a contract employee; or if you own a farm…). How they go about the disallowing I don’t know… Perhaps via an audit?
Back to the original topic, would you (or any others who file as a pro gambler) mind sharing exactly what data you keep in your log? Even if you haven’t had to “prove” your log officially, I believe it would help some of us. As a fledgling pro, I am trying to determine not only what the gov wants to see, but also what details/records might be useful as a sole proprietor. I’m curious to know what records, if any, those of you who are actually turning a profit deem worthy of your time to jot down.
(Anyone may PM me if you don’t wish to post publicly. If asked in the future, I will only share what I decide to track for myself, and no names will be mentioned.)
Understand first, that gambling income is 'front page' information where the gambling income is added to the adjusted gross income, but gambling losses are part of Itemized Deductions, which is 'back page" information. Pages refer to the old version 1040. What that means is that unless you are a declared professional gambler, you cannot 'net' your gambling activities in certain circumstances. So, for example, you must list all your W2Gs on the front of the 1040, but can only deduct the losses to the extent that the total losses (plus all other itemized deductions) exceed your Standard Deduction. So, to the extent that your medical expenses (over 7.5% of your AGI), your taxes (up to $10,000), your casualty and theft losses (over 10% of AGI), your charitable donations, and all miscellaneous deductions (which is where you stick your gambling losses) exceed your Standard Deduction), then you can take the Gambling Losses.
Given that the SD for a Married Filing Joint is more than $24k, unless you're a pro gambler, you're boned for taking losses, but you sure are going to have to report the income!
Except for a little something called Revenue Procedure 2015-X. This little gem allows you to 'net' your gambling wins and losses for slots/vp play when you're using a player's card, and meet a couple of other restrictions. I've been using this on my last two returns (never had hand-pay before), and I haven't had any problems. However, I must stress once again, make sure you check with a tax professional!!
As a newbie, I can't post links, so go to the IRS website and search for Notice 2015-21.
As for what must be on a pro gambler's log, it should be a separate log line for each session, with entries for date, time, location, type of game played, buy-in, cash-out, and comments. In theory, if you're going from craps to MS Stud to video poker, then dinner, then the same three games after dinner, then you should have six lines for that day. I usually have a draft email sitting in my mail app with these columns. As I go from one game to the next, I fill out the time, buyin and cashout, then save the draft. At the end of my day in the casino, I send it to myself. When I get home, I transfer the data to my spredsheet, and save that in Dropbox (even the free version has versioning). When I do my taxes, that's one file that I keep with my other tax files.
I hope this helps.
Now prepare yourself for the onslaught of tax questions… lol
If I'm hitting big on the bubble craps, I might have ten $3,000 TITOs to cash-in on one day, or over several days. Or I could make one $3,000 TITO my buy-in and every win that puts me over $3,000 gets spit out and I'll have to reinsert them into the machine (on another player seat) to total them up to another $3,000 TITO or two.
My head is spinning over how to gambling log this mess under an IRS safe harbor. I could keep it simple and cash out at the cage just before midnight each night, or I could just let my one session slide for days or weeks.
And has that safe harbor for slots even been passed yet? Seems they've been hemming and hawing over it for years and it still may not be final.
Quote: BillHasRetiredI moonlighted for H&R Block about thirty years ago, and have always done my own taxes, and those of my friends, kids, and various folks, even long after I stopped moonlighting. (also did Estate taxes, too.) Just establishing fides. What follows is my best current understanding. {b}This does not constitute legal or tax advice.{/b}….
As for what must be on a pro gambler's log, it should be a separate log line for each session, with entries for date, time, location, type of game played, buy-in, cash-out, and comments. In theory, if you're going from craps to MS Stud to video poker, then dinner, then the same three games after dinner, then you should have six lines for that day. I usually have a draft email sitting in my mail app with these columns. As I go from one game to the next, I fill out the time, buyin and cashout, then save the draft. At the end of my day in the casino, I send it to myself. When I get home, I transfer the data to my spredsheet, and save that in Dropbox (even the free version has versioning). When I do my taxes, that's one file that I keep with my other tax files.
I hope this helps.
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Thank you, and yes it does! I’m retired as well, and I’ve always done my own taxes, until last year; I had many complications other than that hand pay, so I bit the bullet and enlisted a professional. I’ll probably go back to doing them myself for the 2022 tax year.
The Easy Bankroll app does exactly what you describe. It logs date and time, and you can add casinos and games in the settings. Without getting into detail, my last trip to AC has 19 sessions over 3 days. I’m not looking to deduct losses, I’m just looking to cancel out wins. It’s only fair, I think. As a casual player, hand pays don’t come up all that often, and it really irks me to know that I lost for the year, but had to pay anyhow.
Quote: ChumpChangeThe IRS wants you to cash the TITO the same day as your buy-in, but you could just say you bought in for some amount and 3 weeks later you cashed it for $3,000.
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(trimmed)
I don't think they care when you redeem your vouchers for cash.
I think you are probably considered cashed out of the game when you elect to have your credit meter balance issued as a voucher, and that is probably the loggable entry.
To use this revenue procedure, a taxpayer must write “Revenue Procedure 2015-X”
on Line 21 of the Form 1040, U.S. Individual Tax Return
https://www.irs.gov/pub/irs-drop/n-15-21.pdf
Notice 2015-21
This notice provides a proposed revenue procedure that, if finalized, will provide
an optional safe harbor method for individual taxpayers to determine a wagering gain or
loss from certain slot machine play.
This proposed revenue procedure does not address how the separate
transactions determined under the safe harbor are taken into account in determining
total gain or loss for a taxable year.
A session of play begins when a patron places the first wager
on a particular type of game and ends when the same patron completes his or her last
wager on the same type of game before the end of the same calendar day. For
purposes of this section, the time is determined by the time zone of the location where
the patron places the wager. A session of play is always determined with reference to a
calendar day (24-hour period from 12:00 a.m. through 11:59 p.m.) and ends no later
than the end of that calendar day.
nightrider007
Level 1
February 1, 2020 12:11 PM
OK, lets talk about all methods, I know about, of filing a gambling SESSION for RECREATIONAL GAMBLER and how to alleviate a high W2G amount for daily SESSION reporting and how to file the tax return:
Going to start with an extreme example so the point is better understood. Joe, a recreational gambler, is 80 years old on social security and starts gambling with $500 and wins $200,000 (gets a W2G for $200,000) then Joe has a few drinks, on the same day (in same casino), then losses everything – he loses his $500 plus the $200,000 back to casino ON THE SAME DAY (The same DAY is important as it becomes the gambling SESSION)
OK EXAMPLE:
SAME DAY IN SAME CASINO: Joe starts with $500 to gamble
SAME DAY IN SAME CASINO: Joe wins $200,000 and gets a W2G
SAME DAY IN SAME CASINO: Joe loses all $200,000 plus his initial $500
Now Joe has a dilemma as he lost $500 net e.g. started with $500 & ended with $0 but Joe got a W2G for $200,000 but he put all that money back and lost it all (SAME DAY SAME CASINO)
Most, UNINFORMED accountants would report this as $200,000 gambling income and $200,000 gambling loss (you cannot report a loss of $200,500 as gambling losses cannot exceed gambling income). The accountant seems to think it is required to report the $200,000 W2G and the established losses as the rules seem to indicate that "... individuals must include on their tax returns and pay tax on all income, including all gambling income”
If W2G is reported as $200,000 income then Joe (80 years old on Social Security) has an increased AGI (Adjusted Gross Income) of $200,000 now 85% of Joes social security is taxed and Joes Medicare costs go up $423.41 / month or $5,081 for the year (plus he is taxed on 85% of SS) – YIKES BUT JOE LOST MONEY HOW IS THIS POSSIBLE – this is what is so unfair to recreational gamblers – higher AGI has other costs, with how taxes are calculated, so even if you lose money you pay more money when you gamble– crazy but true.
OK now let’s enter the discussion of Gambling SESSION reporting to resolve this issue and lower Joes taxes:
While Joes $200,000 W2G was income the money was “Recycled” and lost on the same day in the same casino (occurred in same SESSION). The IRS determined in multiple cases that SESSION reporting would be allowed as it would be unfair to the taxpayer to have a higher AGI for an event that occurred in a same day SESSION. I will refer to these cases below – but this subject is well documented.
Now using SESSION reporting Joe can report ZERO $0.00 W2Gs on LINE 21 and ZERO $0.00 Loses – nothing to report, thereby Joe SS is not subject to taxation, but Joe must reference WHY he did NOT report the $200,000 W2G or the IRS is almost certain to send Joe a letter – IRS keeps track of W2G income and if a tax payer does not report the W2Gs – IRS computers will flag Joe as not reporting his $200,000 of income.
Now enter the complicated nature of Gambling SESSION filing of your tax return and accepted methods on how to prepare the return.
Above EXPERT MarkK1 says to report gambling SESSION amounts using a reference on other reportable income “Revenue Procedure 2015-X” – see her post above for details – using this SESSION method you would report the W2G $200,000 as income then under other gambling income put a NEGATIVE (-$200,000) netting the gambling income to $0 and referencing session reporting “Revenue Procedure 2015-X”. This would solve Joes AGI problem and no increased taxes from gambling but I do not think the IRS ever finalized the 2015-21 procedure and from reading from two gambling tax experts (I am talking about gambling tax experts not the TurboTax experts)
Let me clarify about the safe harbor act for gambling SESSION report using “Revenue Procedure 2015-X” – this was proposed as IRS NOTICE 2015-21 and others have mentioned it in these discussions. My comments on this are that when the IRS proposed 2015-21 they asked the casinos if they could provide detailed daily session records, for players using a players card as this would have required the casinos to keep and provide these daily records in event the IRS wanted to audit the gambler. The IRS NOTICE 2015-21 reporting also required the player to be playing with a player’s card. Now, the casinos, with their attorneys screamed and kicked and said this was almost impossible – they had comment meetings in Las Vegas where casino attorneys presented why the burden of a casino reporting detailed player card daily records was unreasonable. So, my understanding is that the IRS 2015-21 was never finalized.
Now I am going to list what I think is the best way for Joe to report this gambling SESSION based on information I have read from two well know gambling tax accountants:
Joe would not report any gambling income or loss but would attach FORM 8275 along with his gambling session LOG with the following language:
FORM 8275 Language = "My reported gambling winnings don't match the W-2G total because I used session accounting to arrive at the total for winnings, as per Chief Counsel Memorandum 2008-011 and Shollenberger v Commissioner, which established that wins and losses should be tracked by session, and that 'The Form W-2G that reported their gross winnings from the $2,000 jackpot should not be reported on line 21 as $2,000"
The gambling accountants also recommend Joe attach his daily log so the IRS can see how the daily log shows the session was reported correctly. Some say include the daily log others say to only provide the log if they request it later.
I had another accountant recommend you also report the $200,000 W2G as gambling income then for other gambling income you put a NEGATIVE (-$200,000) – it nets the number to $0 for gambling income but then you could also make a note “SEE FORM 8275” – this requires overriding the tax program and may be very difficult to do and I only mention it as an additional reference – NOT REQUIRED.
On a final note – even if you report using the SESSION method the gambling accountants say you probably will get a letter from IRS about the missing $200,000 W2G (this gets generated by their automated computers) – you answer the letter referring to the FORM 8275, which you filed, and that clearly states you are using the accepted SESSION method of filing.
The link below references all cases, accountants, opinions, etc. on this very complicated subject – you have to read it from top to bottom to find the part you might be looking for but the information on SESSION reporting is very detailed and explained with all references to sources.
https://easy.vegas/gambling/taxes
(in the old days this would be really impractical but with TITO it's practical)
tuttigym
Quote: tuttigymWelcome. It is my personal contention that unless the casino or paying entity provides a W2G or some other official tax document to the player and the IRS, no taxable event has occurred. In other words, there is no documented way the IRS would actually know of gambling wins. Some of these posts infer that all gambling wins, regardless of size, need to be posted on tax returns to be included as taxable income even if there are offset losses to mitigate the totality of the wins. That just does not happen, and the IRS could not track any of it. One of our forum members is a "whale" posting very large wins and, when asked, stating that the casinos did not provide W2G's, so how would the IRS even know about this activity as taxable events? Why should recreational gamblers who happen to be lucky enough to have winning sessions or overall winning years be concerned with the IRS when nothing is presented as such documentation?
tuttigym
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Your personal contention is not relevant. If you win $1, a taxable event has occurred. All gambling wins must be posted on your tax return. I’d give you links, but you have a Google machine. There is no official advice that says otherwise.
Of course they can’t be traced. Of course the IRS is not interested in tracking down 25% of a $127.68 slot win. But that’s not the same as “must be”. It just means the same thing as nobody cares if you roll through a stop sign when no other cars are around. Yes, you must stop, but nobody cares if you don’t.
Now, did you blast through a red light during rush hour at a busy intersection while passing a police car? Be prepared to answer for it. That W-2G or 1099-G is your red light. Don’t ignore it.
My accountant told me to keep a log. The Easy Bankroll app lets me create a log that I can export as a .pdf or .xls and print out to put with my 1040.
So, do you report to the local authorities every time you exceed the speed limit while driving? Laws that are not enforced are irrelevant.
I did not suggest one ignore any issued IRS documents such as a W2G. Read my post as written not as you would like it to be.
tuttigym
May 2nd, 2022: Buy-in: TITO Cash-out: TITO
May 3rd, 2022: Buy-in: TITO Cash-out: TITO
May 4th, 2022: Buy-in: TITO Cash-out: $3,000
One session with a $2,900 win. My session was 40 hours long, 10 hours a day, and consisted of 3,200 rolls of the dice on Bubble Craps, but it's a slot machine and I shouldn't even call it Bubble Craps, but rather just "Slots".
If I lost the $100, I'll just add another $100 to the current day buy-in rather than declaring a loss.
May 1st, 2022: Buy-In: $100 Cash-out: TITO
May 2nd, 2022: Buy-in: TITO + $100 Cash-out: TITO
May 3rd, 2022: Buy-in: TITO + $100 Cash-out: TITO
May 4th, 2022: Buy-in: TITO Cash-out: $3,000
So when I cash-out the final TITO and can say I won $2,700 on the session, I don't need to declare a $200 loss anywhere, it'd be in the buy-in notes.
Quote: tuttigymI am sure your tax accountant is very grateful for the fees you pay for the time he spends doing your taxes. I am also very confident that the billions won by the gambling population are never reported to the chagrin of the IRS.
So, do you report to the local authorities every time you exceed the speed limit while driving? Laws that are not enforced are irrelevant.
I did not suggest one ignore any issued IRS documents such as a W2G. Read my post as written not as you would like it to be.
tuttigym
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That is not what you wrote. You wrote,
Quote: tuttigymIt is my personal contention that unless the casino or paying entity provides a W2G or some other official tax document to the player and the IRS, no taxable event has occurred.
I read your post exactly as it was written. I know what you meant, but it was not what you actually wrote. And if you read what I actually wrote, then you would understand that my entire post was dedicated to clarifying what you meant.
In the example you gave, the player's card is really what rules. There are two things to remember: the $10,000 filing requirement (IRS Form 8300), and the W2G that you receive for a 'hand pay'.
So, let's say you worked your way up to the $3000 max on the TITO and decided to cash it in. You're an average player, and not a pro. You have not won a hand-pay, and you never win more than $10k in any one day at the casino. Approved answer: keep a gambling log, report wins under miscellaneous income, attempt to report losses in itemized deductions, and sleep well at night. What most folks do: hush up and hope to skate. And they probably will, since casino win/loss statements are services for the player, not reportable to the IRS.
Scenario two, same as above, but you save all your tickets because you don't want to carry cash, and thus, have more than $10,000 to cash out. You attempt to skate, but there's a letter around October from the IRS, asking where that 10k came from. Now you're hosed--you've run afoul of Form 8300, and the IRS might just decide to pull all your bank records for the past three years and audit you.
That's the reason to cash in, if you're trying to skate. You don't want to be cashing in for 10k of tickets for any one day. Again, I don't recommend this, but heh-heh, we're talking gamblers here--we're all going to roll the dice and take our chances.
Quote: BillHasRetiredI have used procedure 2015-X for the last two years and have not had any trouble yet. If I do, I'll let everyone know.
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The problem is you could be doing it all wrong and still get away with it.
Quote: billryan
The problem is you could be doing it all wrong and still get away with it.
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Too true.
Having read ChumpChange's very in-depth post on page 8 (referencing Shollenberger v Commissioner), I would suggest doing that on Form 8275 is perhaps preferable to Procedure 2015-X. Reason? Shollenberger is settled law. Thus, the IRS cannot kick.
If I get questioned by the IRS, I am definitely use the language ChumpChange posted.
