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Another tax on big winnings thread...

Discussion in 'Misc. Vegas Chat' started by KazakhKrusher, Nov 3, 2015.

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  1. KazakhKrusher

    KazakhKrusher Tourist

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    As a UK national(passport holder) we are exempt for paying tax on gambling winnings in our own country or in Vegas.
    It hardly seems fair that US citizens are gambling with money that has already been taxed as earnings(most of the time) and then are taxed again if they win after using that money to wager with.
    My question is... Does this anomaly alter your attitude towards gambling i.e playing games with smaller possible jackpots etc in order not to pay tax?
     
  2. KazakhKrusher

    KazakhKrusher Tourist

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    Quick edit: sorry if this has been posted a million times before but VMB keeps bugging me to make a post and this was about as interesting as I could come up with.
     
  3. Corinne

    Corinne Low-Roller

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    The difference I think is that we pay tax on the stake and that should theoretically bring in more tax than tax on willings. You're right that it doesn't seem fair but as a Brit I'm sure not complaining, lol.
     
  4. merlin

    merlin VIP Whale

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    Keep in mind alot of winners dont pay taxes, they itemize taxes and can offset those wins with other losses, as to your question, I would say for some people it is a factor(they might play qtr VP instead of dollars), but for wealthier folks they want to win more than $1199.
     
  5. KazakhKrusher

    KazakhKrusher Tourist

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    We don't pay tax on the stake anymore. The tax is made on the house's(bookmakers/casino) profit. Maybe that tax is sneakily passed onto the consumer but it isn't a direct tax.
     
  6. KazakhKrusher

    KazakhKrusher Tourist

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    Sounds interesting. How do you prove your annual gambling win/loss to the IRS?
     
  7. shifter

    shifter Degenerate Gambler

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    Of course it's not fair.

    Ironic that double taxation like this from Britain is what started the American Revolution.

    And now America is the one doing it and Britain is not.
     
  8. FuzzyDiceCraps

    FuzzyDiceCraps High-Roller

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    If I go to Vegas and win a $100,000 jackpot, after taxes I still have over 60,000 more than before I made the bet. I'll gladly pay the tax if it means I'm still in the black.

    Plus, as stated above, I itemize, meaning I'm normally paying a reduced amount (if any at all) on any gambling winnings I'm lucky enough to have.

    Full disclosure: I've never won even close to a 100,000 jackpot, but it makes math easier....and I'm trying to get myself psyched up for the coming trip and that 6-figure hit. ;)
     
  9. nostresshere

    nostresshere Mr. Anti Debit Card

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    Yes, it sucks. And in my mind, it is wrong. The money I spend is what is left after paying taxes in the first place.

    Even worse, it might "appear" that I won something when in reality I leave the casino with a loss.

    Yes, since I itemize I can balance out those losses. But, since the win goes on page 1, it does impact some other things. For example, I pay an extra $250 for medicare due to those damn W2-gs.

    And yes, it has contributed to my reduced number of visits to casinos. I do try to avoid higher paying machines, but..... I do like the $5 machines which then result in...
     
  10. KazakhKrusher

    KazakhKrusher Tourist

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    Yes but you won 100,000 not 60,000. Gladly paying the tax will mean for a decent proportion of players the difference between being in the red/black in lifetime terms.
    Also this lump sum v annual payout situation of baffling as well. If you win $5m then logic dictates you get a cheque for $5m not an offer of a $3m lump(-40% tax) or 20 yearly payments.
    Americans you have my sympathy
     
  11. nostresshere

    nostresshere Mr. Anti Debit Card

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    Sadly, for some folks they may have $50-$100k in W2-gs for the year. Does it mean they actually are in the black? Doubtful. I can show you my win/loss statements with a pile of W2-Gs. It is not pretty. Yet, the feds think I have winnings/income.
     
  12. merlin

    merlin VIP Whale

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    You're supposed to have a gambling log detailing wins and losses, or other records supporting your claim. In actuality you dont need anything unless the IRS questions it, which is unlikely.
     
  13. nostresshere

    nostresshere Mr. Anti Debit Card

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    There appears to a wide range of answers, but bottom line, you do not need anything - unless they ask. I have seen many say they turn in their win/loss statements to the accountant, and that works fine. Of course it does, because it does not go to the IRS, which may or may not accept that in an audit. We have all seen people that write off a pool as a health expense. Yes, it works fine, until the IRS looks at it.
     
  14. Iceicecool

    Iceicecool Low-Roller

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    Not everyone knows this, but when Obama passed Obamacare, he added a tax to income BEFORE deductions for people who's income is over 200K. For example, if I make 180K a year at my job and I have 60K in W2-Gs, regardless of how much I lost gambling there is still a new tax as of last year on the amount of pre-deduction earnings over 100k. This new tax is what is probably going to tip me over the limit to stop playing high limit video poker.
     
  15. KazakhKrusher

    KazakhKrusher Tourist

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    How about if Americans play in say Mobte Carlo or Macau. What happens then?
     
  16. nostresshere

    nostresshere Mr. Anti Debit Card

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    will not get a W2-G, but the IRS says all income is reportable and taxable.
     
  17. hammie

    hammie VIP Whale

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    When you realize that winnings are paid out from the losses of others, it's even more frustrating. It's not a zero sum game, they don't build casinos to hand out money, all games are negative expectation. Steve Wynn put it best when asked how to make money at a casino, "own one". I guess the legislature views this as a transfer of wealth, so naturally it has to take a slice.

    Taxation by the Crown without representation started the American Revolution, throwing tea crates into Boston harbor brought things to a head.
     
  18. FuzzyDiceCraps

    FuzzyDiceCraps High-Roller

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    That's why its critical to keep a log/record. You can't rely on the casino's win/loss reports. When I handle tax appeals for clients over this, I want to make sure and see that log and that it backs up what my client is reporting. If you have that record there isn't an issue, just as with any other business or venture that you're claiming deductions for - have that paper trail.

    Does it make the tax fair? Absolutely not. But if you win you have to pay the tax, and if you lose, you shouldn't have to - just make sure you can prove it.

    Edit: By the way, I understand how aggressive/bullheaded the IRS can be, so these logs are more often easily said than done effectively, and my post was not intended to suggest you (or anyone else) is doing anything wrong. The feds see taxes such as this one as "free money"- not to get political, but these are the "invisible taxes" that nobody talks about when politicians talk about all the social services they're going to create, or wars they're going to fight, while "lowering" or "not raising" taxes. The taxes aren't fair, but its the world we live in.
     
  19. mdee

    mdee VIP Whale

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    If you have a Players Card and you use it, you are able to download a Win/Loss Statement at the end of the year from the Players Club.
    Doesn't matter if it's M-Life, Total Rewards, Wynn, Venetian etc... They all have Win/Loss Statements available. And Wynn mails them to you.
    But according to the IRS you are supposed to keep a running log with the Dates, Time, Amount Wagered/Loss, Location etc...
    However I've only received one W2G Form over the years. I just send the Statements to my CPA and hoped for the best.
     
  20. Hobofrank

    Hobofrank Prime Minister of Idiocracy

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    US table players don't have this problem
    their winnings are not reported to the IRS for games that pay off at ~200:1 odds
    only cash transactions are noted at or above $10 K in a 24 hr period

    and that CTR (Cash Transaction Report) is basically going to a "dead letter" file
    meant only to catch money laundering and racketeering ( Mafia or drug cartels..etc)

    so we're on an Honor system so to speak
     
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