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Paying taxes on wins13 December 2015
What happens at the table games? How do they keep track of your winnings/losses?
Is there a limit when you cash your chips in that they give you a W-2G? How do they track your winnings?
How do I maintain records of my bets for profit/loss for tax purpose?
ANSWER: Let’s be clear on one thing. The IRS considers all gambling winnings to be taxable. If you win $20 on a penny slot, the IRS would like to see you report it.
As a practical matter, you, I and the taxman all know most small wins are going to be more than offset by losses. So reporting small wins is on the honor system, and the IRS doesn’t track every bet. It’s the windfalls where the IRS wants to make sure it gets its share. So on electronic games, you are required to sign a form W-2G before the casino can pay you on jackpots of $1,200 or more.
Similarly, on table games, the IRS doesn’t track each win, or even each winning session. It’s more concerned with the windfalls that you’re not going to lose back on the next hand. On a table game, if the jackpot is $600 or more AND the payoff is 300-to-1 or greater, you are required to sign a tax form before you’re paid.
It’s a standard that makes sense. A high-roller betting $1,000 a hand at blackjack doesn’t need a W-2G for each hand he wins. He’s likely to lose more hands than he wins, anyway. Win 45 hands in an hour and lose 55 for a $10,000 loss, the last thing you need is a tax bill on $45,000 in “winnings” to go with it.
For the time being, the IRS does not track your cumulative wins and losses, though there has been a proposal to change that. Even a winning session that runs into thousands of dollars is not automatically reported. Your cashouts at the cage also are not automatically reported, although cash transactions totaling $10,000 or more in a single gaming day must be reported to the Financial Crimes Enforcement Network.
Whether you’d dealing with jackpots at electronic games or wagering large sums at the tables, players who itemize on their federal taxes can deduct losses up to the amount of winnings. Should that be in your plans, you’ll want to keep a diary showing the date, time, casino, table or machine number, amount of your buy-in and amount of your cashout each time you play.
For more detailed information, check out “Tax Help for Gamblers” by Jean Scott and Marissa Chien.
QUESTION: I’m a craps newbie, and I was wondering if you could slow down and explain something to me. You say there are six ways to make 7. I only count three, a 6 and a 1; a 5 and a 2; and a 4 and a 3. Nothing else adds up to 7. So what are the other three ways?
ANSWER: You have to consider the faces of each die independently. Imagine you’re using one red die and one green. Then the ways to make 7 are red 6-green 1; red 5-green 2; red 4-green 3; green 6-red 1; green 5-red 2; and green 4-red 3.
On a real table, the two dice are the same color, but the same principal applies. There are two ways to make a 6 and 1, two ways to make 5-2 and two ways to make 4-3.
This article is provided by the Frank Scoblete Network. Melissa A. Kaplan is the network's managing editor. If you would like to use this article on your website, please contact Casino City Press, the exclusive web syndication outlet for the Frank Scoblete Network. To contact Frank, please e-mail him at email@example.com.
Best of John Grochowski