I've been told by several reliable sources (i.e., people who have done it on the advice of a tax preparer) that a standard win/loss rate of 85% is seen as reasonable and not questioned by the IRS, even if there is no documentation for those losses available. So if you submit a W-2G for a $2,000 win you should be able to claim a $1,700 loss trying to win the $2,000, so only paying taxes on $300 wouldn't be questioned.
Yeah, there are some states where you can't use losses to offset your W2-G amount for state taxes. That really sucks for higher roller slot/VP players.
Im in CA and I placed 5th in a slot tournament last March and I have a W-2 of 2,500, so I will offset my losses of 2,500 and be even again.. and hope i still get a refund.
The replies I've seen so far are pretty accurate. For federal you can claim your losses up to the amount of your W2g wins. For your state income tax, you may or may not be able to do that depending on the state. I got screwed a couple years back b/c RI decided that you can no longer claim your losses. Also, keep in mind, if you have substantial wins, that does go to your overall gross income for the year, so say you have a total of 30K in W2g wins, that will add to your income for the year and may put you into the next tax bracket.
If you have legitimate losses to offset wins, claim them, to not do so is madness. It's up to the irs to disallow your claims, NOT the other way around. Now if you win a hundred grand and try to offset the whole thing, that's a different story. There is no downside to offsetting all your losses, if they dont question anything(98% chance) you are ahead, if they do question it and you have proof, you are ahead, and if they question it and disallow it, you pay what you would have anyway.
Sadly, most folks have losses well in excess of their W-2Gs. Way more. The above theory says if you have $100k in W2gs, then you should only deduct $85,000 and pay taxes on $15,000 that you do not have. Sounds crazy!
This should be bolded. Obviously a lot of people itemize, but everyone just assumes that you can offset your winnings with losses, and the reality is that you can't, if you just take the standard deduction. Something to keep in mind if you're ever playing a team slot or something and are trying to determine what person's name to put on the W2-G. If you put it on someones who doesn't itemize, their taxes (and if you're like me, you pay your "share" of the taxes, so everyone's taxes) will be on the full amount of the win.
Wisconsin is one of them! The hypocrites in the state run a lottery, have Indian Casinos and eliminated the gambling loss deduction at least 10 years ago. They used to follow the Fed rules, but now any reportable (W2G) win, gets added into regular income. So, 6.5% tax, no matter how much you lost.
I'm screwed I had $ 8500 in w2g winnings, but lost more than that. don't have enough deductions to itemize so I must pay taxes on the $8500 even though I lost more than that
No. It's been a while, but if I recall correctly there was an IRS form for that. You can state your actual losses (or estimated losses) on that form. As I said earlier, claiming a loss of 85% of the win without documentation won't raise any eyebrows. You should be able to claim that you lost $7225 trying to win the $8500, then only pay taxes on $1275.
Lucky55 was saying that he cannot itemize because he had insufficient amount to deduct. He was using the standard deduction. I do not believe there is a special form to claim gambling losses if a person does not use a Schedule A.
No you have to itemize, as was pointed out previously in the thread. If you take the standard deduction and don't itemize, you will owe taxes on the entire amount.
Yes, unless you itemize. For 2013 the standard is $6,100 for single and $12,200 for married. But remember, the $8500 loss would be included in your itemized deductions. So if you're single you could write off the losses. Married, you just need to find $3,500 more in deductions. Property tax, medical expenses, including health insurance premiums etc.
You already have $8500 on your way to itemizing, prop taxes, state taxes, car license fee's, and the good old charitable deductions should get you something. Not to mention the medical costs if you can get that over the 7.5% threshold(it might be 10% now).
I had several tax forms in Louisiana and Mississippi this year. Each takes out a cut before the hand pay. Looking through the forms today I realized there is probably over $1000 in state tax. I live in Texas and am not sure if I need to file a tax return in these states and if I can get the money back. In Tunica, the slot attendants said I could, but not sure they are the best sourse of information. Thanks in advance for any suggestions.
State tax forms on gambling I think you have a choice if you want the state taxes withheld or not from a winning pot. (maybe not all states) I do know that in South Dakota, Colorado you do have a choice. Filing tax forms of wins and losses is one of the main reasons folks need to get a players card. They track all your play and at the end of the year you can request the win or loss amounts and they mail them to you. The idea of an earlier post that "you must track your daily play and what machines you played and blah blah blah" Is a huge waste of your time! The IRS can't even keep track of their expenses on their corporate outings, these are the professionals that we entrust???? Just get your play tracked and you will have all the information you will need come tax time. I guess if one is really desperate you can go to the dog or horse track and pick up all the losing tickets tossed in the garbage or lying on the floor!
What Joe said about the win/loss statement is correct. People that are on Social Security have a problem with the gambling wins being counted as income BEFORE the losses are taken into consideration. My tax man tells me not to gamble because of it and I tell him what the hell else am I going to do. Another thing, comps can count as income.
