Online Roulette

I'm not sure this is the right to ask this question but I don't see anywhere else to. Here's my question. I just started playing online roulette but I have no idea how take care of taxes for my winnings. Can someone tell me what to do? I called someone around town but she wanted me to come in and pay $50 for the first hour and $35 for every hour after that. That's ridiculous when all I need to know is how to list losses and winnings on ledger. Do I date it by each day I play and make a row of losses and winnings? Or what? Any help would be greatly appreciated! Thanks!

Well, first off any advice you get on here should be taken with an *, as most people who'll respond do have knowledge on the topic, but are not accountants. You should really ask an accountant if you're that worried. What is $50 for 1 hour? You should be able to get all of your questions answered within that first hour and then you'll know what to do and never need assistance past your regular filings again.

I'm pretty sure there's a section on most returns for gambling winnings/losses. Usually if you win over $1199 at a casino from slots, etc, then they'll pay you while having you fill out an 1199 form (funny how those numbers match up). These forms are then entered on your taxes to account for your winnings.

With an online casino it really varies... How much did you win? You're playing roulette, so I can't imagine you won $20k. Not only that, if you've lost $2,000 before hitting some big win for $2,000, then that evens out and I wouldn't even worry about reporting it. If you only won $500, or $1,000, I honestly wouldn't even worry about it. You only have to claim/report it when it hits your bank account (not while it's in your online casino account), and only after a certain amount even (I think it's like $10k you get flagged from your bank).

*A friend of mine* played online poker for years through college and the poker boom. He regularly put money in to his bank account in amounts of like $500 every few days, sometimes once a week, etc. He never claimed anything, never heard anything about it, and never worried about it. This was about 10 years ago. Take that how you want...

I've Googled it and there are so many answers it gets very confusing. I probably will have to go to an accountant because I don't want to screw myself and with the IRS it's very easy to do that.

At the end of the year subtract losses from fictional winnings, and declare the positive amount as income.
Pay taxes on fictional winnings.
No accountant needed, very simple.
If audited, the ledger is your proof of fictional winnings.
If paying taxes on gambling winnings you will not get audited.
IRS will be amazed that you are paying taxes on a negative expectation game.

Quote: dlc1962

I've Googled it and there are so many answers it gets very confusing. I probably will have to go to an accountant because I don't want to screw myself and with the IRS it's very easy to do that.

Look this isn't going to help you, but I run a business and have a finance/accounting back round so I do all my own taxes and reporting. I can tell you from experience that if you call the IRS and ask the same question to three people you will get three different answers. Literally. The key is do what seems fair and be consistent. If you do it the same way every quarter/year whatever, you will be ok. Just have your paperwork ready in case of an audit or an issue. All most any paperwork is acceptable if it seems logical and honest to them. But the tax code on so many things, is so complicated, even the administrators of the code (IRS or state comptrollers), don't fully understand how to apply it. I know this is a math site and people want hard numbers. But when it comes to the IRS and the tax code there really is more than 1 way to do things. There is no "right" answer sometimes. It's always open to some interpretation.

one thing to be sure of, online winnings are not reported to the IRS

so personally I think you only need be concerned about Al Capone syndrome

This is just more confusing. LOL Some of you are saying pay taxes. Others of you are, basically, saying it's roulette you won't win that much so don't worry about reporting it. This is more or less what I found on Google. Seems no one agrees on the subject. Okay, how would I setup a ledger? Would A column for losses on a daily basis and a column for wins? What confuses me is to do I'd basically have to sit with the ledger in my lap and every time I make a bet if I lose put it in the loss column. If I win put it in the win column. Is that about correct? Any other suggestions?

Quote: dlc1962

This is just more confusing. LOL Some of you are saying pay taxes. Others of you are, basically, saying it's roulette you won't win that much so don't worry about reporting it. This is more or less what I found on Google. Seems no one agrees on the subject. Okay, how would I setup a ledger? Would A column for losses on a daily basis and a column for wins? What confuses me is to do I'd basically have to sit with the ledger in my lap and every time I make a bet if I lose put it in the loss column. If I win put it in the win column. Is that about correct? Any other suggestions?

My suggestion is you keep a daily log by casino, record your wins or losses each day. If the casino offers a year-end accounting, print it out.

If you're not a professional gambler (claiming you're in the business), your gambling winnings, less the amount of your losses, are reported on line 21 of a standard 1040, and only if you're itemizing deductions on a schedule A. If winnings exceed losses, report the net amount there as income: keep records. If losses exceed winnings, you can only file for zero (not take a deduction). Also if losses exceed winnings, unless you receive one or more W2G's from someone, it's not worth reporting the winnings as zero, but you should still keep records either way.

Disclaimer: I am not an accountant or tax preparer. This is how I've done my taxes for 30 years, and the IRS has never had a problem with it.

Edit: here's the IRS pub on it . This is all you need to do.

Quote: dlc1962

I'm not sure this is the right to ask this question but I don't see anywhere else to. Here's my question. I just started playing online roulette but I have no idea how take care of taxes for my winnings. Can someone tell me what to do? I called someone around town but she wanted me to come in and pay $50 for the first hour and $35 for every hour after that. That's ridiculous when all I need to know is how to list losses and winnings on ledger. Do I date it by each day I play and make a row of losses and winnings? Or what? Any help would be greatly appreciated! Thanks!

Don't worry about it. Your losses will soon far exceed your winnings.

As you can probably tell I'm in no way a professional. I'm doing this for the math because I like to calculate my averages of winning, the fun of it and to make little extra money. I work a part time and this would help out making a little extra money. Your suggestion makes the most sense so far. I going to get a ledger and with each date I'll put columns for losses and winnings and keep up with it that way. Is that okay to keep records? At the end I'll probably use an accountant/tax preparer.

There is a sympathy quick file box you can check its in a list of games that they know you probably wont win at. Roulette is on top of the list.

Just using the practicing mode I don't do all that bad. Besides, I'm not looking to make lots of money. Cards aren't my thing. Suggestions?

Play live games.

Like which ones?

As long as you're not generating W2-G forms, you're pretty much on the honor system to pay your taxes on gambling winnings in the US, which should be reported on your 1040 form. You can claim offsetting losses on Schedule A. I'm not an accountant, so somebody correct me if I'm wrong.

Besides of live games what other games are good to play on online casinos. Online casinos are better for me because I have agoraphobia.

I think keeping consistent and accurate records of everything one does in a casino is wise, to put it mildly, regardless of the tax reporting requirements, every single time you play something somewhere somehow, without fail and without any of the commonplace gambler's bullspit of "that doesn't count" type of fudging, and I don't know of any reason to think this would be any less true for online virtual "casinos." I find such records useful in many ways depending on the game, with different metrics (using the ability to calculate hourly rate from various poker sessions vs. looking at the ROI of different wager types and events in race wagering for example) but one major reason to do this kind of thing in general is the always strong tendency to self-delusion, and I've found that those who don't keep detailed consistent records are pretty much 100% guaranteed to be wrong about what they imagine their actual results are, even for that very day if they don't get into the mindset of rigorous record keeping. So at a minimum start to do what the ever-charming Commie Gal Babs suggested above for taxes, and you'll probably eventually find you'll be doing yourself a bunch of other favors you hadn't thought of. There are easy simple pre-baked apps and sites for doing this kind of tracking, but I don't have one to recommend off hand since I use a spreadsheet that I've customized for my own purposes in the types of things I play.