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Misdom
Misdom
Joined: Jun 25, 2016
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June 25th, 2016 at 11:31:42 PM permalink
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??!
rsactuary
rsactuary
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June 26th, 2016 at 12:19:23 AM permalink
I think I need more information.

What bet were you making exactly? Odd/Even or Red/Black?
sabre
sabre
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June 26th, 2016 at 1:28:11 AM permalink
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.
RS
RS
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June 26th, 2016 at 3:27:40 AM permalink
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?
rsactuary
rsactuary
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June 26th, 2016 at 3:34:07 AM permalink
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.
odiousgambit
odiousgambit 
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June 26th, 2016 at 3:55:39 AM permalink
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.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
GWAE
GWAE
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June 26th, 2016 at 3:57:23 AM permalink
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.
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GWAE
GWAE
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June 26th, 2016 at 4:03:30 AM permalink
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.
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teddys
teddys
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June 26th, 2016 at 11:33:33 AM permalink
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.
"Dice, verily, are armed with goads and driving-hooks, deceiving and tormenting, causing grievous woe." -Rig Veda 10.34.4
OnceDear
Administrator
OnceDear
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June 26th, 2016 at 1:11:47 PM permalink
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.
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