I got my first W-2G and don't know how to report this on my tax return. Can anybody help me? I think KJ once mentioned he files as a business (Schedule C). No taxes were withheld on my W-2G.
Do I just lump it in with all my gross receipts?
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I got my first W-2G and don't know how to report this on my tax return. Can anybody help me? I think KJ once mentioned he files as a business (Schedule C). No taxes were withheld on my W-2G.
Do I just lump it in with all my gross receipts?
It surprises me that this is your first W-2G MWP, with all the years you have been playing. Is it video poker?Quote:
Originally Posted by Midwest Player
Regardless, you don't file as a business do you? Not from your gambling, right?
So if not, you report the w-2G amount under other income, but then you offset that same amount, assuming you have losses totaling that amount or more, on schedule A. (you can only offset up to the amount of winnings) You don't need to include any documentation backing up those losses unless requested to and then a handwritten record will suffice.
No need to involve schedule C unless you are really filing as a business and unless you have really moved into new territory, I don't think that is you. And if you have moved into new territory, I would check with a tax professional. Preferably one with a good understanding of gambling tax.
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Originally Posted by MDawg
You put them in File 13.Quote:
Originally Posted by Midwest Player
You might want to check with a tax pro as in order to deduct gambling losses from winnings you need to file schedule A, but in doing so you give up claiming the standard deduction, opting instead to itemize your deductions in order to capture the claimed losses.
What if you don't have enough other deductions to make it worth while to itemize?
Could be a dilemna depending on the numbers.
Yes, I file as a business and have been doing it for years. At one time Michigan didn't allow gambling losses, but now they do. I never had my gambling reporting questioned either by the IRS or Michigan. I believe MathProf and Bootlegger both filed as a business if I remember correctly from my old BJ21 days. I know MathProf had trouble convincing the IRS since he had another full time job, but the IRS backed down and accepted his return.Quote:
Originally Posted by kewlJIt surprises me that this is your first W-2G MWP, with all the years you have been playing. Is it video poker?Quote:
Originally Posted by Midwest Player
Regardless, you don't file as a business do you? Not from your gambling, right?
So if not, you report the w-2G amount under other income, but then you offset that same amount, assuming you have losses totaling that amount or more, on schedule A. (you can only offset up to the amount of winnings) You don't need to include any documentation backing up those losses unless requested to and then a handwritten record will suffice.
No need to involve schedule C unless you are really filing as a business and unless you have really moved into new territory, I don't think that is you. And if you have moved into new territory, I would check with a tax professional. Preferably one with a good understanding of gambling tax.
I'm now retired and have no other job except my gambling. When Covid came along I quit going to brick and mortar casinos and now play mostly blackjack promotions on line. I was never much of a slots player so that is why I never had a W-2G before. When MI legalized online gambling in 2021 they offered some great promotions. Promotions are still offered but they aren't great anymore.
I have been playing online for 4 years and all those years were winning years. In fact 3 of those 4 years were five figure wins and better than any min wage job many retirees take. In 2024 I played 595 gambling sessions so pretty much full time.
So my question to you is how are your W-2G's reported on your Schedule C. Are they broken out or lumped in with gross receipts? I have very detailed back up records on an excel spreadsheet.
Great for you MWP. Don't read any sarcasm...none intended. I am sincerely happy for you. Sounds good.Quote:
Originally Posted by Midwest Player
Since you are filing as a business, I am not going to advise you. I know how my advisor handles my and my brothers returns, but I don't feel comfortable advising that. I would recommend you pay someone who really does that kind of thing. It doesn't necessarily cost that much to do so if it is fairly simple and it sound like your is.
You might also want to check with an advisor to be sure filing as a business for a retired person supplementing income is the best route. I am not sure it is.
When itemizing, the W2-G doesn’t mean anything. If you play a machine, get $500 stuck, then hit a 2K jackpot, then quit the session….you won $1500 and that’s the number that goes in your log book. The W2-G number is never used.
Note, in the log book, the total of your winning sessions versus the total of your losing sessions determines if you owe taxes or not.
If you don’t itemize you owe tax on the W2-G amount.
I keep a log book of each casino session I play: I write down the amount each session started out with and then I pen in how much, if any, is left after the session is over.
Say I have five sessions in a trip: at the end of the trip I add and subtract the total wins or losses of the sessions to get the final win or loss number for the trip, and it is that figure I write down {with the name of the casino and the date played) on a separate list with a "running total."
This is the list I then go to at tax time to see how much I've won or, more typically, lost over the year: to my mind it is a "real" number.
Ah, but here's the rub...the IRS would like to know the total amount of each an every individual bet (loss) and any winnings (win) and I simply can't provide that: I only have session amounts and an accurate end of the year total showing whether I won or loss and the amount.
What to do?
I fudge the numbers.
Let's say at the end of the year I was actually up $2000 (yes, it happens) and had 6 hand pays totaling $10,000; I would guesstimate / project a relatively good faith number to roughly albeit conservatively estimate the total amount bet and total amount won, and then make certain the difference matches my log: e.g. $23,800 bet, $25,800 won.
I have to fudge the numbers due to the W2-G,s: the IRS gets copies and their computer is looking for me to report those winnings so I have to mention them as other income, but it would look unrealistic if I reported no other income with them.
My CPA suggests perhaps reporting only the W2-G payments as other income and then report an equivalent amount as loss on schedule A, but that seems dangerous: gotta talk with him more about it.
While I've never been audited I suspect I'd do fine using the method I have been using for decades.
KJ, did you ever hear of Russel Fox? He is 1 of only 5 tax attorneys in the entire country who specialize in tax gambling. He has a very good podcast over on "Gambling with an Edge." A few years ago I posted on Norm's site about this.Quote:
Originally Posted by kewlJGreat for you MWP. Don't read any sarcasm...none intended. I am sincerely happy for you. Sounds good.Quote:
Originally Posted by Midwest Player
Since you are filing as a business, I am not going to advise you. I know how my advisor handles my and my brothers returns, but I don't feel comfortable advising that. I would recommend you pay someone who really does that kind of thing. It doesn't necessarily cost that much to do so if it is fairly simple and it sound like your is.
You might also want to check with an advisor to be sure filing as a business for a retired person supplementing income is the best route. I am not sure it is.
Here is part of that post.
I did look up and listen to the 10/28/21 GWAE with Russel Fox. I don't think he said anything I didn't already know but he did confirm many items.
https://youtu.be/KoNmvuLFVLg
I liked when he said someone who makes say $20,000 a year gambling, but has a full time job making a $100,000 a year could qualify as a business for the gambling.
I never had the IRS or the state income tax folks question how I reported my gambling income. I once had the state question another item on my return but they didn't question at all my gambling reporting.
I do have very detailed gambling records but I don't report start and end time of a session. I report my sessions by the day. However, this online gambling is a whole new ball game. Some online deposit promotions require to play the promotion thru before you can withdraw your money. I don't let any money stay in the gambling site. When the promotion is over I withdraw the money back to my special account set up only for gambling.
At the 15 minute mark into the podcast he talks about filing as a business. It seems you think only full time gamblers can file as a business. Not true according to Russel. This is a good podcast.
I'm not asking for tax advice from you. I'm just asking where a W-2G is shown on your tax return. I do not see why this is such a big deal to disclose.
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Originally Posted by MaxPen
Yes MWP, I am familiar with Russel Fox and his partner, who are not only both experts in gambling tax but have co-authored books on gambling and poker.Quote:
Originally Posted by Midwest Player
Where did I say, that someone playing part-time while working or operating a different business could not file his gambling play as a business?
I am not a tax expert MWP. That is why I pay someone who is. So I don't advise and guess at stuff like that, that I don't know. Every situation is different, and I don't even know yours.
I don't want to dismiss you MWP, but I thought you were a retired guy, longtime retired guy actually, that played a little blackjack on the side and in your retirement, which for most, filing as a business would be overkill. Sounds like you are now doing a bit more than what I last heard. I don't have your answer. I honestly would suggest you talk to some sort of tax expert, and preferably not someone from an H & R Block or Jackson-Hewitt. Someone that has some understand of gambling tax law.
But let me ask you this MWP: If you are going in the hospital for surgery, do you talk to your doctor about it or do you ask people on an internet forum? :D
https://i.imgur.com/3nmNeg9m.jpgQuote:
Originally Posted by monet
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Originally Posted by Ozzy
You don't "report" the W-2G, you attach it.
What if no tax was withheld?Quote:
Originally Posted by MisterV
The only post in this thread that has teeth without the cavities is mickey's.
It's amazing how little gambling-tax knowledge you people have....and how much fear is present. And the subject doesn't require kew and his ongoing "I'll get involved with some info I gleaned from elsewhere, and it'll look like I know the system".
Just amazing.
Doesn't matter, you are required to attach all W-2G's to your return.Quote:
Originally Posted by Midwest PlayerWhat if no tax was withheld?Quote:
Originally Posted by MisterV
I'm not sure your statement is correct. See following links.Quote:
Originally Posted by MisterVDoesn't matter, you are required to attach all W-2G's to your return.Quote:
Originally Posted by Midwest PlayerWhat if no tax was withheld?Quote:
Originally Posted by MisterV
https://ttlc.intuit.com/community/ta...urn/00/1958326
https://www.taxprotalk.com/forums/vi...hp?f=8&t=32645
I always mailed mine in til I hired a CPA to do it, so I've no idea about the requirements viz. electronically filing a return: I only told you what I knew to be true based on my personal experience.Quote:
Originally Posted by Midwest Player
Thanks for the links, they were informative.
Listen to Rob folks.Quote:
Originally Posted by Rob.Singer
With the millions he won on the double up bug & also with his experience receiving a 7 figure W2G on video poker which was one of the largest if not the largest VP jackpot in history, he would be the most qualified person on here to discuss tax implications of W2Gs.
No KJ, I don't think filing as a business is overkill. Even though Russel Fox said filing as a business involves having to pay self employment tax, there are some additional taxes for retired folks that maybe be over looked. Okay, you have to run the numbers which I haven't done.Quote:
Originally Posted by kewlJ
The additional tax is on high earners who have to pay more for their Part B and Part D Medicare premiums. I don't know if you ever heard of above and below the line, but these taxes are based on adjusted gross income which is above the line while itemized deductions are below the line. If I included my gambling winnings in other income it becomes part of my adjusted gross income, and my MAGI would be in the $266,000 to $334,000 range. I would have to pay an additional $220 every month for my Part B and Part D premiums. If you file as a business (Sch C) both winnings and losses are above the line and you don't have this problem.
KJ, you seem to think I'm some kind of idiot when it comes to taxes. I majored in accounting in college and took both individual and corporate income tax courses which were an easy Ace for me. I'm no tax expert, but I do know a lot about income taxes which Rob Singer thinks everyone he is clueless.
Here is a link to these taxes for folks on Medicare.
https://www.ssa.gov/benefits/medicar...-premiums.html
I don't think you are an idiot at all MWP. I don't know where that comes from. Don't confuse or lump me in with some of the folks at Normy's forum that give you a hard time. You are ok with me.Quote:
Originally Posted by Midwest Player
You should look into what is most beneficial for you. Absolutely. I am just saying that I am not sure that should involve asking people on an internet message board. And I can answer the very most simple question as I initially did, but anything more than that, I am not your guy. There is a reason why I pay an expert in the field I am involved with....because I am not an expert. The only thing I will say is don't be overly concerned with that W-2G. It isn't any kind of red flag that it seems you are thinking it is.
Again I am very glad to hear you had such a good year, your 3rd best in 39 years, I think I read. :) And good luck with your taxes and keeping as much of it as you can.
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Originally Posted by Rob.Singer