Gambling TAX

In vegas i won twice at a roulette machine, which is a real roulette table, but it has no human dealer. Its spun by a machine, so the casino categorizes this as a "slot" game. So any wins iver $1200 on "slot games" are considered a jackpot and a casino staff must hand pay you the money and then unlock your machine to allow you to continue playing. They also give you a W-2G tax form for every jackpot win. I won 2 separate jackpots there, each was $1600. I got a tax form for both. But i noticed on both forms it said my wager was only .50Cents even though i wagered $800. When i won the $800 bet it gave me my 800 back plus the winning $800 =$1600. **My question is why do i have to pay taxes on $1600 if half of it is my own money i already had? Why did they say in my tax forms that i wagered only .50Cents? They said they dont keep records of my losses so how do i prove to IRS that i even lost anything to get my deduction? If IRS takes 25% of my winnings that means ive actually lost money at the end of the day when you calculate my Net profit amount. It doesnt seem logical seeing that i won 2 jackpots worth $3200, and only gained $200 actual profit from them, and the goverment wants to take away more money than my profit was! Am i mistaken here? How can i prove i lost other than just my words if the casino doesnt keep records on roulette machine??!

I think I need more information.

What bet were you making exactly? Odd/Even or Red/Black?

Keep a record book. Show it to the IRS if you're audited. Hopefully you itemize. Otherwise you're learning the hard way why betting $800 on an even money machine bet is a terrible idea.

You deduct your losses against your W2G's.

You have $3200 in wins but $1600 in losses. Plus everything else that happened.


Edit: Oh, were you martingaling?

But the casino was in error saying the bet was 50 cents. And that should have been caught at the time. He would be in a stronger position with the IRS if they had recorded that properly.

I see that all the time on VP jackpots, they put in 1 coin.. thinking it doesn't matter. I've started correcting attendants on that matter.

As far as I can tell, the government considers gamblers degenerates who spend all their money foolishly, so they might as well get in on the spoils too.

I'd guess the chances that you itemize your deductions are very low. That will mean that you can demonstrate on your tax form you have lost money gambling overall and it won't matter. You will now have $3200 showing as income on which there has been no withholding and you will be taxed the full amount.

I suppose if you get enough W2-g's, you can automatically qualify to itemize. You really don't want to get these things on purpose though.

If you itemize your deductions, you may find you have still made a mistake getting those W2-g's since they will increase your AGI, your total income before adjustments. This can have undesirable effects, for example on Social Security and Medicare recipients.

Take this to the bank: you do not want any W2-g's at all whatsoever if they can possibly be avoided. It is well worth betting amounts that make it impossible or nearly impossible to get one.

Quote: rsactuary

But the casino was in error saying the bet was 50 cents. And that should have been caught at the time. He would be in a stronger position with the IRS if they had recorded that properly.

I see that all the time on VP jackpots, they put in 1 coin.. thinking it doesn't matter. I've started correcting attendants on that matter.

I don't think it really matters what your wager was. Point is that all electronic games are w2gs after 1200.

This was an issue for a friend of mine playing the electronic BJ. He had bet 300, split and doubled. He lost his split but won his double. He had a payout of 1200 but 900 of it was his. Still w2g.

Op, not sure what your tax situation is but you only write off loses if you itemize on your taxes. If you take the stanDard deduction then you have to claim your w2gs as income in full and pay taxes on those totals even if you were a net loser for the day.

Quote: odiousgambit

As far as I can tell, the government considers gamblers degenerates who spend all their money foolishly, so they might as well get in on the spoils too.

I'd guess the chances that you itemize your deductions are very low. That will mean that you can demonstrate on your tax form you have lost money gambling overall and it won't matter. You will now have $3200 showing as income on which there has been no withholding and you will be taxed the full amount.

I suppose if you get enough W2-g's, you can automatically qualify to itemize. You really don't want to get these things on purpose though.

If you itemize your deductions, you may find you have still made a mistake getting those W2-g's since they will increase your AGI, your total income before adjustments. This can have undesirable effects, for example on Social Security and Medicare recipients.

Take this to the bank: you do not want any W2-g's at all whatsoever if they can possibly be avoided. It is well worth betting amounts that make it impossible or nearly impossible to get one.

Og, you are very right. W2gs really screwed us about 6 years ago. We were doing income base repayment plan for student loans. They look at your previous years AGI for this figure. We had 7k in w2gs but couldn't itemize. That 7k was enough to knock is out of then program. With normal income our payment was like 440 a month . With out that 7k it would have been 200. So we not only had to pay 2k in taxes at the end of the year but we spent an extra 2k on monthly payments. Those w2gs cost us 4k and its not like the 7k was even profit.

Quote: GWAE

Og, you are very right. W2gs really screwed us about 6 years ago. We were doing income base repayment plan for student loans. They look at your previous years AGI for this figure. We had 7k in w2gs but couldn't itemize. That 7k was enough to knock is out of then program. With normal income our payment was like 440 a month . With out that 7k it would have been 200. So we not only had to pay 2k in taxes at the end of the year but we spent an extra 2k on monthly payments. Those w2gs cost us 4k and its not like the 7k was even profit.

THIS is how most people get screwed. Do not get W2-G's if you are taking advantage of any program/incentive that considers your Adjusted Gross Income.

Also don't gamble in dumb states like Ohio that don't allow you to offset losses on your state return.

Quote: teddys

Also don't gamble in dumb states like Ohio that don't allow you to offset losses on your state return.

Or gamble in the UK where the tax authorities are not in the least bit interested in individuals' gambling winnings or losses.

Quote: OnceDear

Or gamble in the UK where the tax authorities are not in the least bit interested in individuals' gambling winnings or losses.

That is true but if you are American and living in the U.S. you still have to declare and pay taxes on it.

Quote: DRich

That is true but if you are American and living in the U.S. you still have to declare and pay taxes on it.

Sucks to be you
:p

Quote: OnceDear

Or gamble in the UK where the tax authorities are not in the least bit interested in individuals' gambling winnings or losses.

Go gamble in Great Britain! The air fares are dropping like a rock. The lb is at historical lows. You can play single zero Roulette! Was there a math question? 2F

Quote: Misdom

My question is why do i have to pay taxes on $1600 if half of it is my own money i already had?

you sound like you do not understand the w2-g. IRS wants you to track your sessions win and loss and they leave it up to U to show the proof, and of course U can never prove a total win or a total loss for any session.

CALL the IRS and get their ruling.
maybe email so U have a paper trail of what the say

Quote: Misdom

Why did they say in my tax forms that i wagered only .50Cents?

ask them

Quote: Misdom

so how do i prove to IRS that i even lost anything to get my deduction?

ask IRS
I have called them in the past and got answers. do not really know IF they were 100% correct answers
but call them, the IRS

Quote: Misdom

Am i mistaken here?

yes, to me you are
cuz you do not understand how the IRS wants U to track your sessions of play in a diary.

Quote: Misdom

How can i prove i lost other than just my words if the casino doesn't keep records on roulette machine??!

your words and session documentations in a diary
is what the IRS is after and they can say in the end they do not believe U.

ask the IRS

U asked lots of questions!

I have a detailed article on how to report your gambling winnings. Short answer, if you won $800, that's the win, regardless of what it says on the form. However, for your yearly win/loss you add up all the DAILY wins/losses over the year. For more details, see the article.

Quote: MichaelBluejay

I have a detailed article on how to report your gambling winnings. Short answer, if you won $800, that's the win, regardless of what it says on the form. However, for your yearly win/loss you add up all the DAILY wins/losses over the year. For more details, see the article.

Rather than 'Daily', I believe the Federal Regs call for 'Session' wins and losses and 'session' is poorly defined. Be confident that your last tax filing year, say 2015, is NOT a 'session'. So you prolly have winning sessions and losing sessions during the year and they are allowed to offset each other. It's not a pretty game. If you lost 10K last filing year you need to win 10K plus your tax rate, call it 13.5K this year to get back to even. I realize that is not accurate math, but it is close enough to give a feel for the TORTURE that our lovely humanitarian Gubment has laid in our path. They never said "No gambler left behind", did they ?

The first thing I thought was that since the relevant box listed "Type of wager", the machine's denomination or minimum bet should have been acceptable. It was the same way that the casino classified my only W2-G from last year for a VP jackpot. Now that I've read the instructions from the IRS website, I see that particular method is completely wrong. This will probably be a painful lesson for the OP but one that many could learn from; I know that after this I'll be double-checking any W2-Gs I get in the future.

Quote: Misdom

<snip>??!

looks like no one here is a tax specialist, by looks only
(not required to file a us tax return)

start here
bite

"IRS Tip Sheet on Gambling Income and Losses
IRS Summertime Tax Tip 2014-03, July 9, 2014"


https://www.irs.gov/uac/newsroom/irs-tip-sheet-on-gambling-income-and-losses

Quote: MichaelBluejay

For more details, see the article.

I say see the IRS right after reading that article.
this has to be right on your nose at all times.

"Gambling Losses
You may deduct gambling losses only if you itemize deductions. "

https://www.irs.gov/taxtopics/tc419.html

"Recordkeeping
It is important to keep an accurate diary
or
similar record of your gambling winnings and losses.

To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information."

Sally says the IRS KNOWS and is not stupid about casino betting, except when giving away Billions $$$ on known bad ID theft tax returns

<<< >>>
of course, placing $1000 into a casino slot machine and losing it all, there IS no record of that loss.

looks to me
IRS wants all your money, and they may give U some back
after they take U to court

I won!


Jacks with a Kicker
(I wants Aces)

I only won $245 as $5 was my bet
yep, sure
Sally

Not to hijack, but you loaded 1K on the machine to start?
You did indeedy win.
$10 ?
A win is a win.
Much better than most players do.

Quote: TwoFeathersATL

Not to hijack, but you loaded 1K on the machine to start?

actually the ticket in was for exactly $1010.00
so at that point in time I was even (happens a lot to me at that casino)

I played another hand or two (I forget as I drink)
and won $30 for the session as my name was NOT called to win that new Mustang!
I think the name called was made up...

some say only Morons go to Casino Morongo, but my Mom likes it there and I get free food and drinks
my Mom won over $100,000 at EZ Bacc
now she is on her way to Asia for vacation
(I due knot know who does her taxes)

Sally pretty

Quote: mustangsally

some say only Morons go to Casino Morongo, but my Mom likes it there and I get free food and drinks
my Mom won over $100,000 at EZ Bacc
now she is on her way to Asia for vacation
(I due knot know who does her taxes)

Sally pretty

This story is very familiar. Im fairly certain you've run into lildevillucy from these forums. You MoronSgo VIPs think you're soooo cool! I do like the lil VIP parties they throw with the random Elvis impersonator or martial arts demonstrators. Never won the car drawing but won a 1k preliminary drawing. Yes, the IRS knows ;)