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Video Poker $5 VP and Splitting W2-G?

Discussion in 'Video Poker' started by VegasLover8, Sep 1, 2016.

  1. VegasLover8

    VegasLover8 Low-Roller

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    We normally play $0.25 JOB or Bonus VP. Thinking about pooling $500 ($250 each) with a friend and doing 20 hands of $5 VP.

    Wishful thinking and highly unlikely on hitting the $20K royal, but just in case......

    1) Would the casino split the W2-G? No is my guess.

    2) I assume the W2-G would be made out to whoever's player's card is in the machine. Will they make it out to my friend or only the players card in the machine?

    3) What percent should be deducted from the other person's winnings who is not getting the W2-G? We are both in the 25% tax bracket for federal tax purposes. With deductions, exemptions, etc., we don't actually pay 25% effective rate. We also have to pay state taxes (Ohio). Is 20% fair?

    4) Have never received a W2-G. Will they withhold taxes?

    5) Just confirming that W2-Gs are only issued when you win $1,200 or more on one deal/spin correct? It will NOT be issued if we hit a few good hands and cash out for more than $1,200 after our 20 hands correct?

    6) JOB or Bonus? I like the higher payouts on certain 4OAKs but since we are only doing 20 hands, should we stick with JOB and the 9-6 payouts on full house and flush.

    7) Better to do this at Mlife or TR casino? No status at either - Gold at TR and Sapphire at Mlife. Leaning towards TR since I seem to get more free rooms from them even with my low rolling gambling.

    8) Should we do high limit slots instead or is VP the better option?

    9) Any other things to consider?
     
  2. merlin

    merlin VIP Whale

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    They wont withhold taxes , remember if you do hit it big, and itemize your taxes, you can deduct the win and pay nothing.
     
  3. mwig

    mwig High-Roller

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    1. I have no idea if they will split the W2G. Lotto agencies do it all the time but I can easily see a casino saying no.

    3. I understand where you are coming from on the effective tax rate. However, in this scenario you need to treat this income as being taxed at the high end of your bracket because this is an add on to your normal situation. Rates are marginal meaning any added income will be at your highest rate and could potentially tip into the 28% bracket if it is enough to push that high. I would say if your high margin is 25% you treat it that way (don't forget state so 10% or whatever extra) and split the net. So, 20k becomes 13,000 and the non W2G participant gets $6,500 cash. Caveat on that last point. The $6,500 is a gift and therefore not taxable but if your friend deposits the cash it is not a bad idea to document that gift.

    4. No tax withholding

    5. The W2G is for a single outcome so you can cash out more and get no form. Typically have to go to the cage with the ticket because the kiosks don't handle tickets larger than the taxable threshold.

    6. Game preference is personal but I would go for 9/6 JOB. Completely understand shooting for the bonus payouts though.

    8. If you are considering slots for the higher variance I would opt for DDB VP. Aces with kicker would be worth 10k so multiple jackpot options without having to fade the 85-93% return on slots.
     
  4. zignerlv

    zignerlv Low-Roller

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    Regarding your inquiry to split the taxable gambling winnings, there is an IRS Form 5754 for this purpose.

    https://www.irs.gov/pub/irs-pdf/f5754.pdf

    https://www.irs.gov/instructions/iw2g/ar02.html#d0e804

    "You must fill out Form 5754 [Statement by Person(s) Receiving Gambling Winnings] before you can receive a Form W-2G [Certain Gambling Winnings] if you are accepting gambling winnings for another person, or you are receiving the winnings as part of a group, such as a number of people who shared the same winning lottery ticket."

    Playing $25 a hand with a $250 bankroll means there is a chance you will lose the entire sum before playing 20 hands.
     
    Last edited: Sep 1, 2016
  5. DeMoN2318

    DeMoN2318 The DERS

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    You can NOT deduct a win... that makes absolutely no sense!

    However, you can OFFSET wins with loses, so if you win 10k and you have 10k in documented loses you can net zero for gambling winnings. If you win 10k and have 12k in documented loses, you can NOT claim a 2k lose... you will claim a net zero for gambling winnings.

    Key word is documented, your players club win/loss statements do not count. your bank statements do not count. You must keep a journal of date, location, machine ID, etc. requirements for acceptable gambling loss documentation can be found on the IRS website.



    As far as the OPs questions, the casino will not split a W2-G, whoever has the most documented loses (or expects to have the most for the year) should take the W2-G and you two should work it out come taxes time (run it with and without the W2-G and see the delta)

    They will only deduct taxes at the casino if you refuse to give them your SSN for them to generate the w2-g, and it will be at 39.6% since they don't know what income bracket you will be in. you will not be able to get the over taxed amount back.

    MLife vs TR doesn't matter really, play where you normally play, I suggest VP for the lower variance.
     
  6. DeMoN2318

    DeMoN2318 The DERS

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    Good link! I was not aware of that form, looks like you need to have that filled out and then give that to the casino so they can generate the multiple W2-Gs. Might be good practice to keep a copy handy if you are planning on doing any kind of pooled playing
     
  7. Snidely

    Snidely VIP Whale

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    You're certainly not lacking optimism!
     
  8. fudgewapner

    fudgewapner Tourist

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    I'd second what someone else said about playing DDB instead. Might as well go for the big hit chance, which is essentially what you are doing.

    Or a hybrid of approach of 12 spins at $5 vp and then a spin each at $100 for WoF and Pinball?
     
  9. tringlomane

    tringlomane STP Addicted Beer Snob

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    I personally would pick 9/6 JoB for higher return slash less chance of a W2G. 8/5 Bonus will also yield a a W2G for quad Aces also.

    If you really wanted to avoid W2Gs (it's not that big of deal though), you should play $5 9/6 JoB where they short the straight flush to $1195. I know Rio and Bally's has one of those.
     
  10. flyguyfl

    flyguyfl Low-Roller

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    Another VP option is full pay Deuces Wild.
     
  11. nostresshere

    nostresshere Mr. Anti Debit Card

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    To clarify/repeat some of what is said.

    W2G must be reported. Actually, IRS says all winnings must be reported. They only get notified via W2-g. If you itemize, you can deduct your losses. Their is a requirement for documentation, but it does NOT get included when you file you taxes. Even you accountant does not have to see it. You need it if they audit and question your losses. (apparently very rare)

    Who gets W2-g? Though then can review the video, pretty sure they could care less. The person sitting there hands the card and ID to the slot attendant. I have often hit a W2-G with my wifes card in the machine. I pull that out and give them mine.

    Withholding? If you want, they will do it. Or at least the few casinos I have hit over $10k on. No problems. I usually do not pay taxes on gambling (since I always give it back), but can use the withholding funds at tax time as some other income does not hold back enough.

    State taxes - many states still consider it real income and do not allow a deduction for losses.

    High limit for VP is no better or worse in itself. Same for $1 vs $5 vs $100. It is the pay table that matters.

    As said... playing a tenth of your bankroll may easily result in going bust in short order. So, getting a W2-g is pretty slim pickins.
     
  12. smerrian

    smerrian Low-Roller

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    Paris has 9/6 JoB in their High Limit area.
     
  13. tringlomane

    tringlomane STP Addicted Beer Snob

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    It's available at the $5 level??? Which casino screwed up this time??? :evillaugh:

    But, yeah, the 3rd best paying Deuces paytable, "Not So Ugly Ducks" (99.73%) is another option with not too many W2G chances. But only Wynn has it for $5 on the strip I think. And I don't think the 2nd best paying Deuces paytable "Almost Positive Deuces Wild" (99.96%) exists in Vegas anymore...SLS used to have it...RIP. Correction: Skyline Casino still has 99.96% Deuces along with "full pay" (100.76%) according to VPFree2.
     
  14. eksantirik

    eksantirik Low-Roller

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    Well, you say it's unlikely to get a Royal within 20 hands, but, you will also get a W2G if you hit Straight Flush or 4OAK. The latter one is obviously more likely. Just another thing to keep in mind.
     
  15. merlin

    merlin VIP Whale

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    You dont need any documentation unless you are audited, none! My point was clear I thought, you win, get a w2g, even though you won you are net down for the year, you do itemize taxes, you offset your win as you should. You pay no taxes on that win as you should. All your post does is confuse and scare people.
     
  16. DeMoN2318

    DeMoN2318 The DERS

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    So you are advising people to lie and cheat on their taxes... greeeeaat advice
     
  17. tringlomane

    tringlomane STP Addicted Beer Snob

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    Quads in JoB only pay $625. Bonus, the only quad that triggers a handpay at the $5 level is Aces. OP doesn't intend to play DB or DDB I think.
     
  18. tringlomane

    tringlomane STP Addicted Beer Snob

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    I think you're making a poor assumption that OP will be able to write off the win if a royal was hit. You gotta play a good amount of quarter VP to accrue $20,000 in losses.

    Now will the IRS overlook someone who has previously never wrote off gambling winnings who all of a sudden writes off a $20k W2-G. Possibly. But if they don't, I pity that person who didn't keep a win/loss log.
     
  19. merlin

    merlin VIP Whale

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    Not at all, Trying to scare people into paying taxes you dont owe is awful advice sir. If you win , get a w2g, and are lucky enough to not lose it all back, you should pay your taxes.

    However if you win and lose it all back like most of us, AND you itemize your taxes, you absolutely should offset that win with corresponding losses. Now as you know most people do not keep a log that the IRS might or might not require if they audit you, but that should not in any way discourage ANYONE from offsetting. If you are unlucky enough to get audited(very small chance) and the irs doesn't like your documentation, all that will happen is that you pay the taxes you would have anyway if you didn't offset.

    There is no downside(unless perhaps you are hiding something else on your taxes). There is no reason to try and scare people into thinking they are doing something wrong, they are not.
     
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  20. nostresshere

    nostresshere Mr. Anti Debit Card

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    The OP is not advising people to cheat. And, the post right above this one by Merlin says it all.

    Adding to that post...

    The actual documentation required is rather unclear. As well as what is a true win that must be reported. Do you report every single dollar you win? Like that $4 on your one play at VP last week, or the $10 on one hand of blackjack? That is a win, right?