Taxation on Specialty Game Payouts
I'm a table games dealer and I've witnessed the following:
A) On Let It Ride, the Player wagered $300/spot, let all three bets ride, and hit a Straight Flush. At 200-1 per bet, he should have been paid $181,200, but the win exceeded the table maximum and was paid $75,000. He was not taxed.
B) On Pai Gow Poker, the Player wagered $5 on the Fortune Bonus, and caught Five Aces. At 400-1, she was paid $2,000. She was not taxed.
C) On Pai Gow Poker, the Player wagered $100 on the Fortune Bonus, and caught a Royal Flush (with no Royal Match). At 150-1, he was paid, $15,000. He was not taxed.
Any information you can provide regarding these "jackpot-like" wins would be greatly appreciated.
Quote: leapday76What is the threshold for taxation on the main and side bets for specialty/novelty games (e.g., the Fortune Bonus on Pai Gow Poker, Let It Ride, etc.)?
I'm a table games dealer and I've witnessed the following:
A) On Let It Ride, the Player wagered $300/spot, let all three bets ride, and hit a Straight Flush. At 200-1 per bet, he should have been paid $181,200, but the win exceeded the table maximum and was paid $75,000. He was not taxed.
B) On Pai Gow Poker, the Player wagered $5 on the Fortune Bonus, and caught Five Aces. At 400-1, she was paid $2,000. She was not taxed.
C) On Pai Gow Poker, the Player wagered $100 on the Fortune Bonus, and caught a Royal Flush (with no Royal Match). At 150-1, he was paid, $15,000. He was not taxed.
Any information you can provide regarding these "jackpot-like" wins would be greatly appreciated.
I am not a tax expert, but I have won 3000 on a Fortune bet, and 3300 on a slot jackpot (In the same day!). Neither was taxed. Both times, my player card was in use. I had to sign documents and show ID to collect the full amount, and I think they might've filed a W2G (I expected one), but I didn't get one come tax time.
Quote: leapday76What is the threshold for taxation on the main and side bets for specialty/novelty games (e.g., the Fortune Bonus on Pai Gow Poker, Let It Ride, etc.)?
I'm a table games dealer and I've witnessed the following:
A) On Let It Ride, the Player wagered $300/spot, let all three bets ride, and hit a Straight Flush. At 200-1 per bet, he should have been paid $181,200, but the win exceeded the table maximum and was paid $75,000. He was not taxed.
B) On Pai Gow Poker, the Player wagered $5 on the Fortune Bonus, and caught Five Aces. At 400-1, she was paid $2,000. She was not taxed.
C) On Pai Gow Poker, the Player wagered $100 on the Fortune Bonus, and caught a Royal Flush (with no Royal Match). At 150-1, he was paid, $15,000. He was not taxed.
Any information you can provide regarding these "jackpot-like" wins would be greatly appreciated.
When you say "taxed" do you mean "given a W2-G"? Or do you mean "taxes actually withheld on the spot?"
The terminology is confusing because all gambling winnings are taxable (for citizens of the US of A, that is). It's just up to you to self-report it in the majority of cases.
Confusing things even further is that if you hit a slot jackpot of over $1200 (the most commonly understood W2-G case), you will get a W2-G regardless, but may or may not have taxes withheld on the spot. If I understand the law correctly, you won't have any taxes withheld as long as you provide a SSN or a TIN. If you fail to provide either, you will have some set percentage withheld and remanded to the IRS.
For table games, I believe the rule is that a win of 300-1 or greater, with a payout of $600 or greater, should trigger a W2-G. So case (B) from your example should have required a W2-G, but not the other two. However I am unclear on when taxes are actually withheld in the case of a table games W2-G. Is it the same rule as slots?
Quote: beachbumbabsI am not a tax expert, but I have won 3000 on a Fortune bet, and 3300 on a slot jackpot (In the same day!). Neither was taxed. Both times, my player card was in use. I had to sign documents and show ID to collect the full amount, and I think they might've filed a W2G (I expected one), but I didn't get one come tax time.
I don't believe you normally get another w2g. You are supposed to use the one they give you at the table.
OP, to be fair, ALL winnings should be taxed. Just because the casino does not withhold tax does not mean they shouldn't pay taxes. You of course can offset your winnings with loses in most states but you still have to included the wins and loses on your taxes.
Quote: AxelWolfDose anyone know what would happen if you are American citizen but refuse to give your ssn? I know they withhold 30% for foreigners. If your an american citizen and they hold the 30% I assume it gets sent to the IRS. Dose anykne know how this prosses works? Is it attached to your name somehow? Or do they just send a lump some at the end of the year?
I'm not sure about if you don't show them SSN. But if you show them SSN, you can also request that they send so much of the jackpot money to the IRS. In that case the amount you send will be listed on the W-2G that you are issued on the spot.
I had a friend who complained to me once about being invited to a freeroll slot tournament at Ramada/Laughlin. He won the tournament and they 1099'd him. He objected and wanted a W-2G. They wouldn't comply. He was pissed because he was on the hook for the full taxes. As he explained it, you can't write your gambling losses off against a 1099 because the money is considered a gift.
Quote: mickeycrimmI don't know if all table games have the same threshold but in poker tournaments you are W-2G'd at $600 or higher. Machines are $1200 or higher. Bingo is $1500 or higher.
I had a friend who complained to me once about being invited to a freeroll slot tournament at Ramada/Laughlin. He won the tournament and they 1099'd him. He objected and wanted a W-2G. They wouldn't comply. He was pissed because he was on the hook for the full taxes. As he explained it, you can't write your gambling losses off against a 1099 because the money is considered a gift.
A freeroll by itself isn't a gamble, and the IRS 1099-MISC form is very clear:
Quote: 1099 MISC instructions
Also enter in box 3 prizes and awards that are not for
services performed. Include the fair market value (FMV) of
merchandise won on game shows. Also include amounts
paid to a winner of a sweepstakes not involving a wager. If a
wager is made, report the winnings on Form W-2G, Certain
Gambling Winnings.
However, if your friend is a professional gambler, it seems likely the freeroll entry was earned as a result of prior wagering activity and therefore should also be classed as wagering activity (that is, those prior losses can be deducted against any tournament winnings). He should talk to a tax pro as to whether that's a proper income classification.
Quote: MathExtremistA freeroll by itself isn't a gamble, and the IRS 1099-MISC form is very clear:
However, if your friend is a professional gambler, it seems likely the freeroll entry was earned as a result of prior wagering activity and therefore should also be classed as wagering activity (that is, those prior losses can be deducted against any tournament winnings). He should talk to a tax pro as to whether that's a proper income classification.
Thanks for the information ME. This was several years ago and I didn't get the end of the story. I suspect he filed as an amateur.
The requirements for reporting are different from withholding, and withholding depends on whether you provide your TIN. The W-2G instructions have all the details.Quote: HunterhillB should be taxed, as it is a payoff of more than 300-1 and more than $600.I'm not sure where you got the $5000 figure from?
I'm asking if someone can avoid a W2G and or your name being sent to the government by giving up the 30% to the casino. Occasionally I have friends/people play for me on various good plays, where a taxable would be rare, but it could happen, however they refuses to sign for ANYTHING that would attach their name to the government, for various reasons.(perhaps they, have a judgment against them, owe child support, owe taxes, wanted by police, get government assistance, get a trust fund, Afraid of deportation, just plain tinfoil hat reasons) They would refuse the money. They wont even except a 57/54 or what ever its called from me. In a situation like this I would be willing to give up the 30% on a big jackpot. However I would have to assure them that their information would not get attached.Quote: mickeycrimmI'm not sure about if you don't show them SSN. But if you show them SSN, you can also request that they send so much of the jackpot money to the IRS. In that case the amount you send will be listed on the W-2G that you are issued on the spot.
Quote: AxelWolfI'm asking if someone can avoid a W2G and or your name being sent to the government by giving up the 30% to the casino. Occasionally I have friends/people play for me on various good plays, where a taxable would be rare, but it could happen, however they refuses to sign for ANYTHING that would attach their name to the government, for various reasons.(perhaps they, have a judgment against them, owe child support, owe taxes, wanted by police, get government assistance, get a trust fund, Afraid of deportation, just plain tinfoil hat reasons) They would refuse the money. They wont even except a 57/54 or what ever its called from me. In a situation like this I would be willing to give up the 30% on a big jackpot. However I would have to assure them that their information would not get attached.
The bottom line is that if you want to remain anonymous, they will take the IRS's cut. And then you have no proof that you paid that money, because it isn't linked to you.
Now given the self-reporting nature of gambling winnings and taxes, you could very easily account for that payment in your "gambling diary" and not report those winning or something. But there's no above-board way to do it. That would not not fly during an audit.
Quote: AcesAndEightsThe bottom line is that if you want to remain anonymous, they will take the IRS's cut. And then you have no proof that you paid that money, because it isn't linked to you.
Now given the self-reporting nature of gambling winnings and taxes, you could very easily account for that payment in your "gambling diary" and not report those winning or something. But there's no above-board way to do it. That would not not fly during an audit.
Too bad you cant do what's done at the race tracks. Got a huge winning ticket that's taxable, there are plenty of 10 percenters that will pay cash for the ticket minus 10 percent.
When I lived in MD, I met an old 10 percenter. He paid off winners minus 10 per cent and collected losing bet tickets thrown away. He eventually got nailed by the IRS. The IRS eventually took him to court, his proof were bags of losing horse racing tickets to offset the winnings he collected. Unfortunately, he lost the case because a lot of the losing tickets were dirty with footprint marks.
So are you certain when the casino sends in the governments cut they send it with no names attached? I assumed they send an itemized list of what was hit and the name of who hit it, along with a notation no SSN provided 30% with held.Quote: AcesAndEightsThe bottom line is that if you want to remain anonymous, they will take the IRS's cut. And then you have no proof that you paid that money, because it isn't linked to you.
Now given the self-reporting nature of gambling winnings and taxes, you could very easily account for that payment in your "gambling diary" and not report those winning or something. But there's no above-board way to do it. That would not not fly during an audit.
The taxes would be paid, so why would that not fly during an audit? Im talking less then 10k not 100s of thousands. No one would be trying to get out of paying taxes they just want their name to remain anonymous to everyone but the casino.
Quote: mickeycrimm) He was pissed because he was on the hook for the full taxes. As he explained it, you can't write your gambling losses off against a 1099 because the money is considered a gift.[/q
All he was interested in was if he could write off gambling losses against this? Does he cheat if he actually wins - and makes up losses? Who would do such a thing?
I get a few w2G's each year, and I always take a check and have them withhold a certain percentage for the feds. There's no mystery. If your name goes on the tax form (and that's the only way you will get paid) then your name goes into the IRS as the winner of X amount, whether or not you have tax withheld. You won't get paid in full without an ID and SS#, otherwise they will automatically deduct 30% before paying so they can send that money into the IRS withat least a name attached. But you must have an I'D, even if it's from Borneo.
Quote: AxelWolfSo are you certain when the casino sends in the governments cut they send it with no names attached? I assumed they send an itemized list of what was hit and the name of who hit it, along with a notation no SSN provided 30% with held.
The taxes would be paid, so why would that not fly during an audit? Im talking less then 10k not 100s of thousands. No one would be trying to get out of paying taxes they just want their name to remain anonymous to everyone but the casino.
Because if you don't give an SSN and just your name, you would have to have a unique name to link that tax withholding to your tax record.
I'm not a tax professional, but I don't see any way that you can get credit for those taxes paid without providing your SSN.
