NOT subject to 90% gambling loss limitation?
October 14th, 2026 at 5:38:54 PM
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https://www.nsktglobal.com/usa/blog/report-gambling-winnings-w2g-schedule-1-2025
Professional gamblers are NOT subject to the 90% gambling loss limitation that applies to casual gamblers starting in 2026. As business income and expenses, professional gamblers continue to deduct 100% of gambling losses as ordinary business expenses on Schedule C.
hm.. Can't wait till this accounting firm's court cases (if any) to set precedence
Professional gamblers are NOT subject to the 90% gambling loss limitation that applies to casual gamblers starting in 2026. As business income and expenses, professional gamblers continue to deduct 100% of gambling losses as ordinary business expenses on Schedule C.
hm.. Can't wait till this accounting firm's court cases (if any) to set precedence
Last edited by: 100xOdds on Oct 14, 2026
Craps is paradise (Pair of dice).
Lets hear it for the SpeedCount Mathletes :)
October 14th, 2026 at 6:37:08 PM
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I'm beginning to think the slot YouTubers don't have a 24% tax withholding on their big wins is because the win is still less than 300X their bet. They bet $500/spin and there's no withholding until they win $150,000 or more. They are also likely to be professional gamblers so they won't be affected by the 90% rule, but they'll have to pay a 15.3% self-employment income.
So a player could be hit two different ways.
$10 million of coin-in; $10.1 million of wins for a $100K profit:
Player A, casual gambler) Only gets a $9.09 million loss deduction and owes tax on $1.01 million income
Player B, Pro gambler) Gets 100% loss deduction and scores a $100K profit and pays a $15,300 self-employment tax for a pre-income tax win of $84,700.
Again, this will have to be fought in a Federal Appeals Tax Court for unconstitutional taxation on phantom income, and there's little reason to believe judges will override Congress.
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Break Even Gambling in 2026 and the IRS Still Taxes You — Congress Just Moved to Fix It -
Vegas Decoded - 9.09K subscribers - Oct 2, 2026
https://www.youtube.com/watch?v=ccKByYVcxAo
The 90% gambling loss deduction rule took effect January 1, 2026: win $100,000, lose $100,000, and the IRS still counts $10,000 as income. On September 16 a House committee voted 38–5 to undo it.
This episode works through the math with real examples, traces how the change got into the 2025 tax law, shows who it lands on (poker pros and heavy players who itemize) and why most Las Vegas visitors were never able to deduct losses in the first place, covers the new $2,000 slot jackpot reporting line, and lays out what Congress still has to do before January. This is an explanation of the law, not tax advice.
What you’ll find out in this video:
• How the 90% rule taxes a break-even year, and even a losing one
• How the change entered the 2025 tax law and why the first fix stalled
• Why most Vegas visitors could never deduct losses anyway: the itemizing rule
• The slot jackpot tax-form line moved from $1,200 to $2,000 in 2026
• What has to happen in Congress before the repeal becomes law
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Another rule makes the $2,000 threshold go up by the amount of inflation each year. With 3.6% inflation, casinos would have to adjust their thresholds to $2,072 for 2027. But I've seen this before in other calculations where if the amount doesn't go up by $100, it doesn't go up at all, and it could be stuck at $2,000 until a 5% inflation year hit, or until the cumulative inflation hit 5% since 2026. The amount could go up in $100 increments over the years as they calculate the cumulative inflation since 2026. I don't really know, but I don't expect tax forms to be an odd amount such as $2,072.
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Even AI says: Professional gamblers include business expenses in the loss total, then apply the 90% cap.
Professional gamblers report gambling as a business on Schedule C and can deduct related business expenses, but the 90% cap now applies to those wagering losses and expenses too under the OBBBA changes.
https://us-tax-calculator.com/articles/gambling-lottery-winnings-tax/
If your losses exceed your winnings by more than 11.1%, it will erase the phantom income and you'd owe no tax on it, you'll get a full loss deduction up to your winnings.
So a player could be hit two different ways.
$10 million of coin-in; $10.1 million of wins for a $100K profit:
Player A, casual gambler) Only gets a $9.09 million loss deduction and owes tax on $1.01 million income
Player B, Pro gambler) Gets 100% loss deduction and scores a $100K profit and pays a $15,300 self-employment tax for a pre-income tax win of $84,700.
Again, this will have to be fought in a Federal Appeals Tax Court for unconstitutional taxation on phantom income, and there's little reason to believe judges will override Congress.
******************************************************************************
Break Even Gambling in 2026 and the IRS Still Taxes You — Congress Just Moved to Fix It -
Vegas Decoded - 9.09K subscribers - Oct 2, 2026
https://www.youtube.com/watch?v=ccKByYVcxAo
The 90% gambling loss deduction rule took effect January 1, 2026: win $100,000, lose $100,000, and the IRS still counts $10,000 as income. On September 16 a House committee voted 38–5 to undo it.
This episode works through the math with real examples, traces how the change got into the 2025 tax law, shows who it lands on (poker pros and heavy players who itemize) and why most Las Vegas visitors were never able to deduct losses in the first place, covers the new $2,000 slot jackpot reporting line, and lays out what Congress still has to do before January. This is an explanation of the law, not tax advice.
What you’ll find out in this video:
• How the 90% rule taxes a break-even year, and even a losing one
• How the change entered the 2025 tax law and why the first fix stalled
• Why most Vegas visitors could never deduct losses anyway: the itemizing rule
• The slot jackpot tax-form line moved from $1,200 to $2,000 in 2026
• What has to happen in Congress before the repeal becomes law
*******************************************************************************
Another rule makes the $2,000 threshold go up by the amount of inflation each year. With 3.6% inflation, casinos would have to adjust their thresholds to $2,072 for 2027. But I've seen this before in other calculations where if the amount doesn't go up by $100, it doesn't go up at all, and it could be stuck at $2,000 until a 5% inflation year hit, or until the cumulative inflation hit 5% since 2026. The amount could go up in $100 increments over the years as they calculate the cumulative inflation since 2026. I don't really know, but I don't expect tax forms to be an odd amount such as $2,072.
*********************************************************************************
Even AI says: Professional gamblers include business expenses in the loss total, then apply the 90% cap.
Professional gamblers report gambling as a business on Schedule C and can deduct related business expenses, but the 90% cap now applies to those wagering losses and expenses too under the OBBBA changes.
https://us-tax-calculator.com/articles/gambling-lottery-winnings-tax/
If your losses exceed your winnings by more than 11.1%, it will erase the phantom income and you'd owe no tax on it, you'll get a full loss deduction up to your winnings.
Last edited by: ChumpChange on Oct 14, 2026
October 14th, 2026 at 9:01:22 PM
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I figure some gamblers are paying taxes quarterly already in 2026, so they should have already found out they are losing more than 11.1% on the slot machines on average.
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$1,000 in Taxes Owed — Penalties and What to Do
If you owe $1,000 or more in federal taxes after subtracting withholding and refundable credits, the IRS may charge an underpayment penalty if you didn’t pay enough through withholding or estimated tax payments.
When the Penalty Applies
You can avoid the underpayment penalty if:
• You owe less than $1,000 in tax after subtracting withholding and refundable credits, or
• You paid at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if AGI > $150,000).
If you don’t meet these, the IRS calculates the penalty per quarter based on:
• How much you should have paid each quarter
• How much you actually paid
• The number of days the payment was late
How the Penalty Is Calculated
• Rate: 0.5% of the unpaid amount for each month or part of a month, up to 25% of the unpaid amount.
• Interest: Charged on the unpaid tax and penalty at the IRS short term rate plus 3%.
• Formula: The IRS uses Form 2210 to compute the penalty; it’s interest based, not a flat fee.
Example: If you owe $1,000 and didn’t pay any estimated tax, the penalty could be up to 25% of $1,000 ($250) plus interest, depending on how long it’s unpaid.
Other Penalties
If you also fail to file your return on time, a failure to file penalty (5% per month, up to 25%) may apply, reduced if you also have a failure to pay penalty.
How to Reduce or Avoid the Penalty
• Make estimated tax payments or adjust withholding before filing.
• Request a penalty and interest estimate from the IRS before filing to see if a payment can avoid the charge.
• Set up an approved payment plan — if you file on time and have a plan, the failure to pay penalty drops to 0.25% per month.
What to Do Now
1. Check your IRS notice for the exact reason and amount due.
2. Pay what you can now and apply for a payment plan if needed.
3. Consult a tax professional to review your situation, minimize penalties, and set up a payment arrangement.
Key takeaway: Owing $1,000 in taxes can trigger an underpayment penalty if you didn’t pay enough through withholding or estimated tax. The penalty is based on the shortfall, time unpaid, and can be reduced with timely payments or an approved plan. Acting quickly and setting up a payment arrangement can help limit the cost.
************************************************************
$1,000 in Taxes Owed — Penalties and What to Do
If you owe $1,000 or more in federal taxes after subtracting withholding and refundable credits, the IRS may charge an underpayment penalty if you didn’t pay enough through withholding or estimated tax payments.
When the Penalty Applies
You can avoid the underpayment penalty if:
• You owe less than $1,000 in tax after subtracting withholding and refundable credits, or
• You paid at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if AGI > $150,000).
If you don’t meet these, the IRS calculates the penalty per quarter based on:
• How much you should have paid each quarter
• How much you actually paid
• The number of days the payment was late
How the Penalty Is Calculated
• Rate: 0.5% of the unpaid amount for each month or part of a month, up to 25% of the unpaid amount.
• Interest: Charged on the unpaid tax and penalty at the IRS short term rate plus 3%.
• Formula: The IRS uses Form 2210 to compute the penalty; it’s interest based, not a flat fee.
Example: If you owe $1,000 and didn’t pay any estimated tax, the penalty could be up to 25% of $1,000 ($250) plus interest, depending on how long it’s unpaid.
Other Penalties
If you also fail to file your return on time, a failure to file penalty (5% per month, up to 25%) may apply, reduced if you also have a failure to pay penalty.
How to Reduce or Avoid the Penalty
• Make estimated tax payments or adjust withholding before filing.
• Request a penalty and interest estimate from the IRS before filing to see if a payment can avoid the charge.
• Set up an approved payment plan — if you file on time and have a plan, the failure to pay penalty drops to 0.25% per month.
What to Do Now
1. Check your IRS notice for the exact reason and amount due.
2. Pay what you can now and apply for a payment plan if needed.
3. Consult a tax professional to review your situation, minimize penalties, and set up a payment arrangement.
Key takeaway: Owing $1,000 in taxes can trigger an underpayment penalty if you didn’t pay enough through withholding or estimated tax. The penalty is based on the shortfall, time unpaid, and can be reduced with timely payments or an approved plan. Acting quickly and setting up a payment arrangement can help limit the cost.
