Hahahahhaha lost a $128 ticket

[DGenBen]

Other countries such as Kenya, Uganda and Tanzania also tax the gambler.

see: https://www.theeastafrican.co.ke/tea...nnings-3892366

I have no problem with the idea of taxing gambling winnings: income is income, why should gamblers get a bye?

I pay no attention to the entire continent of Africa. India is another place I have no desire to have anything to do with...RIP

Mozambique has an AK 47 on their flag.

Unfortunately it’s from their communist past, but still having an assault rifle on your flag is pretty bitchin’ if you ask me.

[mickeycrimm]

A couple of years ago the IRS wanted to lower the W2-G threshold to $600. The casino industry screamed and bitched enough that the IRS didn’t do it.

Also, you keep a log with winning and losing sessions recorded separately. If you hit a taxable for say 4K, that is not the number that goes in the log for that session unless you were exactly even when you hit it. If you were stuck for $500 and quit when you hit the jackpot then $3500 goes in the log. If you were stuck $4500 when you hit it, and quit, the session is recorded in the losing sessions for $500. The W2-G’s don’t have anything to do with the accounting. It only matters what you won or lost in the session. The IRS is well aware of this.

[Mission146]

I'd also add that, as long as your W2-G's aren't positively ridiculous in sum, then your personal logs could include venues where your play wouldn't have been tracked in the first place. I'm not suggesting that anyone do anything nefarious, but it's not as if your losses would be strictly disprovable. VLT parlors are a good example of this as some do not have a players club program (not that you'd be required to play rated even if they did), so if you said you went into a VLT parlor and dropped a grand on a particular date, what is the IRS going to do, say, "No, you didn't!" How would they know?

Most of the taxes they collect via W2-G's probably are from players who took a net loss on the year and just don't know any better; I'm not saying your casual gambler should be expected to know better; I'm just saying many of them don't. Anytime it has ever come up in conversation, people are always stunned when I ask, "Did you win or lose for the year?", and then, if they reply they lost, then I inform them they didn't actually have to pay tax on the W2-G.

The one exception, since losses offsetting gambling winnings counts as an itemized deduction, is that if the standard deduction would exceed your total in itemized deductions, then you'd often be better off just to take the standardized deduction which will result in paying some amount of tax on the W2-G win. Does that mean the IRS is kind of screwing over somewhat poor people on that one? Well, yeah. What would you expect the IRS to do? I believe California (and, soon enough, the Feds) are actively trying to get a piece of gig workers. The Democrats sure care about the poor, though. Just ask them-they'll tell you.

[Mission146]

While we're on the subject:

Gambling taxes (as personal income) are one of, if not the, biggest double standards in this country, as far as laws are concerned.

Essentially, for all but professional gamblers, people go to a casino seeking recreation; however, should they hit a W2-G (technically, they're supposed to report any and all net winnings on the year-W2-G, or otherwise) all of a sudden they are being treated as if they are in casinos as a means of business and are doing so as a sole-proprietorship. Essentially, if you lose your money, then that's personal spend, but if you make money, now it's personal income.

Could you imagine if a stock trader (who had some other primary means of income) couldn't deduct realized capital losses from income other than to such extent as offsets capital gains? That's literally how they treat gambling. If you lose at gambling, then that was just you spending money. If you win at gambling, then they all but treat you as if you're a semi-professional gambler; they certainly treat you as if you had engaged in some form of business.

Am I suggesting that gambling losses should always be deductible?

I would say sure, but only if it remains the case that gambling winnings must always be claimed. Otherwise, no, recreational players should not be able to deduct gambling losses because they simply should not be taxed on winnings. Gambling results, especially at the Federal level, should have no tax ramifications whatsoever, unless one is a professional, which I would define as more than 50.01% of income derived from gambling. As I stated in my earlier post, the IRS essentially has to take any losses ('session/day') you log at face value; it would be impossible to prove them wrong. As anyone could figure out, if gambling losses were strictly deductible, then a great number of people would likely figure that out and deduct from their regular incomes losses that don't actually exist to get out of paying most of their income tax altogether.

The worst part is that you go to the casino, presumably, with money that has already been taxed or is a derivative of the taxation of yourself (such as social security), or others. If the company who owns the casino has net income for the year, then they are going to be paying taxes on that which any player losses will have contributed to. Even ignoring company-wide net profits and losses, Commercial Casinos generally pay taxes on top-line revenues with the only deductions from same being coin-out (read: player win) and anything directly promotional, such as Free Play. I think Free Play might even depend on the jurisdiction, but New Jersey definitely allows for promotional to act as a top-line revenue offset.

Basically, if the player loses, some level(s) of Government gets money. If the player wins, some level(s) of Government gets money. If the player loses, then it was recreational discretionary spend that has no tax consequences. If the player wins, they are essentially treated as if they are a business.

There's obviously nothing I can do about it or that can be done about it. The more electronic things go, the worse it's going to get. The double standard is definitely bullshit. It's either income or it isn't; if it is income, then ANY losses should constitute a loss of income; people shouldn't be conditionally treated as a sole-proprietorship with the condition being profitability.

CET or MGM should really just hire me as a lobbyist. No W2-G's would also benefit the casinos (and especially slot machine designers, in specific) tremendously. Being a lobbyist also seems cush enough for my liking.

[Don Perignom]

I also seem to recall the when the highest tax bracket was higher in terms of % then the US was measurably better off.

That would be the period from 1951 to 1963 when the top rate was either 91 or 92%.

Basically, the highest economic growth period was the Gilded Age, and we've been downhill since then. So yes, the high-tax 1950s were statistically a little "better" than today, but you have to ignore that the best growth occurred earlier when income tax was zero.

And you have to ignore that the economy is more complex than just one variable.

Here's a typical chart that a statist would consider supportive of high taxes:



Trend line would be down slightly from left to right. Notice the left side is much more volatile -- which is ignored because it's inconvenient to the statist argument. (But they dismiss the 19th century because it was volatile.)

It's really hard to find a very long-term chart because of measurement difficulties. Here's a site that computed an index:

https://5minuteeconomist.com/history...ilded-age.html



Other than the two 19th century wars, the trend line looks pretty solid until Woodrow Wilson and the Progressive Era.

At some point capitalism becomes another serfdom with some crazy ledger that is no longer serving people. It is kinda crazy to me how the system works and how it is sold. Trickle down and all that.

Capitalism is voluntary exchange (without interference). Big government is not capitalism. Our entire US history has been an accelerating abandonment of capitalism.

I have a strong libertarian streak in me but

Libertarian but with strong regulation, probably.

[Don Perignom]

The double standard is definitely bullshit. It's either income or it isn't; if it is income, then ANY losses should constitute a loss of income; people shouldn't be conditionally treated as a sole-proprietorship with the condition being profitability.

It's all bullshit. I like to reference hack leftist websites to see what they're willing to justify. Example:

https://www.vox.com/policy-and-polit...orm-ways-means

The only problem with this claim is that it’s clearly false. As of 2014, the tax code was only about 2,600 pages long. The claim that it’s 70,000 pages is based on including tens of thousands of pages about the tax code that a reasonable person would never think of as being part of the tax code itself.

"A reasonable person" would never believe the 70k page claim. It's akshully only 2,600 pages -- which is perfectly reasonable.

[Rob.Singer]

This discussion is thus far predicated on the lowest common denominator and presented in the simplest of terms. US gambling taxes are far more complicated in reality--as everything related to the IRS has always been.

Other than '00-'09 when I filed Schedule C's, every year I've had to make multiple passes when filling out the tax forms just to claim to feel comfortable with how I was being screwed. A large part of that came from my time as a UK resident, where I had to deal with their version of the IRS. They call it Inland Revenue. Over there, you win £1200 on a slot game or a million pound lottery, it was tax free. Not sure if it's still that way today or not.

But with the IRS it's not as simple as it seems by saying "you can write off losses, if applicable,
up to the extent of your winnings". If you have $279000 in W2G's (plus other winnings totalling $2157 for those who for some reason think it "pays to do things right") then you are allowed to deduct up to $281157 in losses. Poof!--all those pesky signers have been mitigated, right? And who's stupid enuf here to think that's all there is to it?

If you're a Simple Man (yes, the greatest of the Lynyrd Skynyrd songs--the best damn band to ever play live in concert) then you would expect to be going happily on your merry way. But the IRS code and its income-reporting ramifications has far more in store for you--and most people who choose to get involved with casino gambling in the US.

Without going too deep, gambling income, regardless of how much you honestly or dishonestly "wipe out" as losses on Schedule A, always grows your AGI (adjusted gross income for you tax evaders out there) and if you're any kind of successful person and for many varying reasons, you do not want that. Even if you're a bum it can hurt. For instance, remember those free "big checks" the federal Government sent out and/or whatever other "freebies for slugs" came along? Being eligible was all based not on work income or welfare income or SS income etc., but on AGI.

Similarly, because our ridiculous tax code was written by someone with a fried brain, gambling-enhanced AGI's more often than not trigger the unexpected but inescapable AMT (alternative minimum tax) which if you don't prepare for by going thru the IRS's typically nonsensical "keep peeling down the onion" worksheet before filing, you'll eventually feel it since that's a computer-generated audit flag in the form of a big bill.

[Mission146]

This discussion is thus far predicated on the lowest common denominator and presented in the simplest of terms. US gambling taxes are far more complicated in reality--as everything related to the IRS has always been.

Other than '00-'09 when I filed Schedule C's, every year I've had to make multiple passes when filling out the tax forms just to claim to feel comfortable with how I was being screwed. A large part of that came from my time as a UK resident, where I had to deal with their version of the IRS. They call it Inland Revenue. Over there, you win £1200 on a slot game or a million pound lottery, it was tax free. Not sure if it's still that way today or not.

But with the IRS it's not as simple as it seems by saying "you can write off losses, if applicable,
up to the extent of your winnings". If you have $279000 in W2G's (plus other winnings totalling $2157 for those who for some reason think it "pays to do things right") then you are allowed to deduct up to $281157 in losses. Poof!--all those pesky signers have been mitigated, right? And who's stupid enuf here to think that's all there is to it?

If you're a Simple Man (yes, the greatest of the Lynyrd Skynyrd songs--the best damn band to ever play live in concert) then you would expect to be going happily on your merry way. But the IRS code and its income-reporting ramifications has far more in store for you--and most people who choose to get involved with casino gambling in the US.

Without going too deep, gambling income, regardless of how much you honestly or dishonestly "wipe out" as losses on Schedule A, always grows your AGI (adjusted gross income for you tax evaders out there) and if you're any kind of successful person and for many varying reasons, you do not want that. Even if you're a bum it can hurt. For instance, remember those free "big checks" the federal Government sent out and/or whatever other "freebies for slugs" came along? Being eligible was all based not on work income or welfare income or SS income etc., but on AGI.

Similarly, because our ridiculous tax code was written by someone with a fried brain, gambling-enhanced AGI's more often than not trigger the unexpected but inescapable AMT (alternative minimum tax) which if you don't prepare for by going thru the IRS's typically nonsensical "keep peeling down the onion" worksheet before filing, you'll eventually feel it since that's a computer-generated audit flag in the form of a big bill.

(Bold Added)

Homeslice, that's basically the first sentence of my first post on this. If you have six-digits in W2-G's, and I would think particularly if your regular income isn't particularly high, the IRS is going to likely request better proof of offset than your personal gambling log; I'm mostly thinking of folks who get a W2-G here or there, and not for any crazy six-figure amounts (or total) could offset it easily enough. I will grant that you went into more detail about AGI and very significant amounts of W2-G's than I'd have been aware of without researching it.

[1Hit1der]

The hardest thing in the world to understand is the income tax.

― Albert Einstein

[Tasha]

A couple of years ago the IRS wanted to lower the W2-G threshold to $600. The casino industry screamed and bitched enough that the IRS didn’t do it.

Also, you keep a log with winning and losing sessions recorded separately. If you hit a taxable for say 4K, that is not the number that goes in the log for that session unless you were exactly even when you hit it. If you were stuck for $500 and quit when you hit the jackpot then $3500 goes in the log. If you were stuck $4500 when you hit it, and quit, the session is recorded in the losing sessions for $500. The W2-G’s don’t have anything to do with the accounting. It only matters what you won or lost in the session. The IRS is well aware of this.

As they should have screamed and bitched about the IRS wanting to LOWER the threshold from $1,200 to $600. The threshold should be RAISED to $5,000, not still be $1,200. $1,200 threshold was started in the 1970's. In the 1970's, $1,200 was the equivalent of around $5,000 today. So, really, nowadays, the threshold should be $5,000. Can't believe that the threshold didn't go up with inflation for around 50 years.

[Don Perignom]

The threshold should be RAISED to $5,000, not $ still be $1,200.

The noose only tightens.

[MisterV]

Every time I get a hand pay I ask the casino to send a chunk to the IRS as an estimated payment.

If you have a winning year overall all and owe a bit of taxes, chances are the amount you prepaid will cover it; otherwise you usually get a nice refund to help fuel future gambling.

[jdog]

you'd often be better off just to take the standardized deduction which will result in paying some amount of tax on the W2-G win. Does that mean the IRS is kind of screwing over somewhat poor people on that one? Well, yeah.

Somewhat poor people?? It's estimated that 90% of Americans take the standard deduction and, my bet is for the vast majority of those, it creates the lowest tax liability and is the correct choice. So again, all this talk about logs is moot. For most people you're paying tax on the W2G period!

...it would be impossible to prove them (gambling logs) wrong. As anyone could figure out, if gambling losses were strictly deductible, then a great number of people would likely figure that out and deduct from their regular incomes losses that don't actually exist to get out of paying most of their income tax altogether.

And there's the rub...

I think we ultimately get to the point that it's nearly impossible to fairly tax winning gamblers. And then the vast majority of gamblers, who are overall losers, are going to pay increased taxes on invalid income. It's a F****d situation.

[Don Perignom]

So again, all this talk about logs is moot. For most people you're paying tax on the W2G period!

I'll say it again. It's considerably worse than that. You're "supposed to" report the total of your winning sessions, which can far exceed the W2G total.

Possible scenario: The feds subpoena your casino records which show net result for each day you played. Add up all the plus signs, and that's what they want to see as your income amount.

[jdog]

I was researching more on filing a Schedule C for gambling. Even though I will probably never do this in my lifetime because I believe the risk of audit is high, but was just curious. It talks about 'qualifying' as a professional gambler. Since when do you have to qualify for anything to claim side business income and expenses?? Yet another double standard?

[jdog]

Possible scenario: The feds subpoena your casino records which show net result for each day you played.

Casino records are not valid for taxation purposes. Just look at any win/loss statement.

[Don Perignom]

Casino records are not valid for taxation purposes. Just look at any win/loss statement.

Yes, but I'm not sure that goes both ways. Rules that apply to you may not apply to the government (according to the government).

I'm speculating though. I haven't found a cite. As an aside though, I stumbled across a couple of possible helpful hints.

Respondent urges that records maintained by DD and Horseshoe, the two casinos at which petitioner gambled the least, see supra pp. 6-7, show that he had net gambling winnings for 2014. But these records were incomplete: The casinos kept track only of jackpots of $1,200 or more and other transactions where petitioner was using his rewards card. Petitioner credibly testified that he often did not use these cards, either because he forgot or because he believed not using the cards could change his luck. The casinos' records were thus biased, being more likely to show wins than losses.

If you're pinned down in a dispute, just say you only used your card sometimes.

In a summary opinion, the Tax Court ruled that a woman who operated a trucking business by day and played casino slot machines by night was a professional gambler, allowing her to deduct $1.4 million in gambling losses as a business expense rather than as a miscellaneous itemized deduction. A key factor the court found in her favor was that although she usually gambled into the early morning hours and sometimes all night, she took no pleasure in it.

If they challenge your professional status, just say you didn't have fun.

[jdog]

If you're pinned down in a dispute, just say you only used your card sometimes.

Right, which is exactly why casino records don't mean much. But a recreational gambler is not going to get pinned down in a dispute because the IRS knows that people generally lose in casinos. They know it would be a waste of time and resources to challenge that a person filing only one or two W2Gs may have additional unreported winnings. Common sense would dictate that a detailed investigation would be far more likely to uncover excessive losses which could only possibly result in a reduction of tax liability.

A key factor the court found in her favor was that although she usually gambled into the early morning hours and sometimes all night, she took no pleasure in it.

All I can say about that is... wow. I mean wow.

[Don Perignom]

All I can say about that is... wow. I mean wow.[/QUOTE]

The full PDF is a mess.

https://bradfordtaxinstitute.com/End...p_2007-194.pdf

Petitioner became increasingly serious about her
gambling pursuits as time progressed and as she became accustomed
to the casinos and learned more about their operations. She
considered herself a professional gambler by 2000. Petitioner
viewed herself as a gambling expert but found no pleasure in
gambling.

Petitioner developed certain strategies she felt would
maximize her odds of winning. Petitioner’s primary strategy was
essentially to locate and play those slot machines that were due
to make a payout. Petitioner strategized that the more money put
into a machine without a payout increased the odds of a payout.
Petitioner would speak with the casino attendants upon arriving
at the casino to determine which slot machines to play. The
attendants would describe what had happened so far that day,
which slot machines were played most heavily but had made no
payouts, and which slot machines had made payouts.

[accountinquestion]

I have a strong libertarian streak in me but

Libertarian but with strong regulation, probably.

I basically see Libertarianism as an example to which we as a society should push for but ultimately I see how restrained such ideas are by the practicalities. IMO the latter part is where I feel most people miss it in these conversations.

I don't know the answers but I know where we should not continue towards.