1. Welcome to VegasMessageBoard
    It appears you are visiting our community as a guest.
    In order to view full-size images, participate in discussions, vote in polls, etc, you will need to Log in or Register.

Filing Taxes on Gambling Wins

Discussion in 'Misc. Vegas Chat' started by BeeeJay, Jan 29, 2013.

  1. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    This should provide the necessary detail and comfort level

    Directly off the IRS website:

    It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.

    Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.

    Your diary should contain at least the following information.

    The date and type of your specific wager or wagering activity.

    The name and address or location of the gambling establishment.

    The names of other persons present with you at the gambling establishment.

    The amount(s) you won or lost.

    Proof of winnings and losses.

    In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment.

    For specific wagering transactions, you can use the following items to support your winnings and losses.

    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances.

    Keno. Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records.

    Slot machines. A record of the machine number and all winnings by date and time the machine was played.

    Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage.

    Bingo. A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc.

    Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack.

    Lotteries. A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements.
     
  2. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    Step 1: Enter the $2,000 on Form 1040, Page 1, Line 21 with the description "Gambling Winnings"

    Step 2: Enter the $2,000 on Schedule A, Line 28 with the description "Gambling Losses"

    Step 3: Make an Excel spreadsheet with the following:

    #1 slot machine # or table # from the casino where you lost.
    #2 time and a date
    #3 total amount you lost
    #4 casino name and address
    #5 names of anyone else with you
    #6 make a copy of your bank withdrawal receipt, ATM receipt, canceled check, monthly statement or whatever other record you have showing how you got the cash out to gamble when you lost.

    Step 4: When you print a copy of your return for your records, print out that excel sheet and attach it to you return with copies of checks, receipts, etc.
     
  3. SH0CK

    SH0CK Stylin' and Profilin' Quasi Tech Admin

    Joined:
    Nov 2, 2001
    Messages:
    12,933
    Location:
    Tennessee
    Trips to Las Vegas:
    37
    Thanks to Beeejay for the details on what is needed to file your taxes when you have a reported gambling win :thumbsup:
     
    • Dislike Dislike x 1
  4. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    Niiiice!!!!

    If I knew dating that stripper who worked a second job at H&R Block was going to get me "A STICKY", besides just getting her "all sticky" I would have let her Supersize at the Mickey D's drivethru on the First Date! :wink2::beer:
     
  5. S'AllGoodMan

    S'AllGoodMan High-Roller

    Joined:
    Mar 13, 2010
    Messages:
    562
    Location:
    CT
    Trips to Las Vegas:
    30
    I just sent copies of my win/loss statements and it was as easy as that. this was for an under reporting audit for a forgotten w2g.
     
  6. nostresshere

    nostresshere Mr. Anti Debit Card

    Joined:
    May 4, 2009
    Messages:
    11,149
    Location:
    TN
    Trips to Las Vegas:
    19
    As this person has stated, this worked for him. Wait here long enough, and somebody will say that was not good enough.

    There appears to be a wide range of what is accepted, and what is not. You can read the rules all day. You can ask a half dozen accountants. You can ask YOUR accountant. You will get lots of answers. Some will be okay. Some will not, even though they were okay last week for somebody else.
     
  7. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    That is more of a "notice" situation than a full fledged audit. The IRS has the option of accepting whatever you provide from nothing to your word to the statement to requiring the full fledged diary proscribed by IRS regulations. If people want to have complete peace of mind, they would need to keep the most complete level of records the IRS could require. Of course this is total overkill most of the time, but some people are of the "better safe than sorry" mentality. Everyone has a different tolerance for risk. :licklips:
     
  8. merlin

    merlin VIP Whale

    Joined:
    Aug 1, 2009
    Messages:
    2,425
    Location:
    mn
    Trips to Las Vegas:
    40
    Keep in mind, you dont need anything unless you are audited. If you win, get a w2g and report it(as you must), you can(if you itemize) simply offset that win with other losses that almost all of us have. There is no need whatsoever for anyone to fail to offset legitimate losses because they are afraid they dont have sufficient proof.
     
  9. HAWJOHN

    HAWJOHN Tourist

    Joined:
    Aug 15, 2010
    Messages:
    414
    Trips to Las Vegas:
    50
    Most of us are small time gamblers and may have a couple of W2G’s. Unless we have other questionable items to claim, the IRS would most likely not waste their time to audit our filings. If I had to keep a detailed record of machines I played, table etc, I would probably not enjoy my stay in Vegas.

    Has anyone in this forum ever been audited after offsetting small W2G wins? If you really want to be technically correct, you must report all wins regardless whether a W2G was generated or not.

    After paying off our home and without interest to claim, I do not have a need to itemize. The standard federal deduction for a couple was $11,600.00 last year. It is slightly higher if you are over 65. We do itemize for state since they have a lower threshold.

    If you still are worried, the below site may be of interest.

    http://tiny.cc/hrftrw
     
  10. boo

    boo Guest

    Thanks BeeeJay!! This will be my first year filing with W2Gs so I'm a little lost/nervous.
     
  11. DonD

    DonD Super Moderator

    Joined:
    Nov 5, 2004
    Messages:
    9,139
    Location:
    So Cal 91748
    Trips to Las Vegas:
    300
    I've been getting W2-Gs every year for many years. So far I've never been audited but if they do, I'm ready. I've only had to pay a small amount one time.

    I have a good friend that lives in Las Vegas and he is registered with the IRS as a professional gambler. He only plays the horses and gets audited about every other year. So far, he's only had to pay one time and that was his fault due to his own record keeping.

    His tax man told me one day that the biggest reason for an audit is people not including a W2-G, even a small one, with their filings.

    He also advised me that if I ever do get an audit and the W2-G part is a big number, get a tax man that really is familiar with IRS gambling rules. He also said, if during the audit, the guy (IRS) doing the audit seems to not be familiar with gambling, try to get an extension for some reason and hope to get one that is familiar with gambling rules. Smart tax man and an ignorant auditor do not mix very well.
     
  12. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    also keep in mind the IRS is severely understaffed in the auditing area and they must focus their resources on those areas that will bring them revenue. there are also some consumer protection rules that preclude them from the stereotypical witch hunts of the past which may scare many.

    By definition gambling is a zero-sum game. Actually a negative for the player. There is no money to be made in auditing small time W-2G offsets with losses, NONE. Best case they are making a few bucks off an innocent player who didn't keep the onerous records.

    All this said, it never hurts to know what you need to put together, like I said, everyone has a very different tolerance for risk and worry.

    BTW, never heard of anyone getting audited at all for any of this crap. The $1,200 reporting requirement is a joke. It should be more like $25,000. It is a total waste of everyones time and bad for the gaming industry.
     
  13. jr7110

    jr7110 VIP Whale

    Joined:
    Jan 13, 2009
    Messages:
    1,022
    Trips to Las Vegas:
    28
    I won a $10,000.00 third prize last March in that big Megamillions record jackpot lottery and the taxes were taken out when I was paid by the NY State Lottery so I have all the proper paperwork for my taxes.

    What happens if you just submit the W2-G's you were issued and do not file for any losses of any kind - can that still trigger an audit? I have had the usual wins and losses that everyone has at a slot machine but only file the W2-G's that I am issued when I win over $1200 in one shot. I have never in my life seen anyone at any casino sitting there with a ledger writing down every spin of the wheels on a slot machine. It just sounds insane for the IRS to require that - and the names of the people you were with???
     
  14. suecasey

    suecasey Low-Roller

    Joined:
    Jul 16, 2006
    Messages:
    160
    Location:
    North Las Vegas
    Trips to Las Vegas:
    100
    All you have to do is claim the total of your W2G's on the "miscellaneous income" line on the first page of your return, and then claim that same total as a deduction for gambling losses on your itemized deductions schedule. You can claim losses for the amount of your claimed winnings, but not more.

    You do NOT send the IRS win-loss statements, which say on them that they may or may not be accurate. They are intended for your own use only, and, as the one from Stations says, "to support your own gambling records."

    If you keep a gambling log (I don't), do NOT send it to the IRS. This is for your use only if you are audited.

    The IRS already knows about your W2G's, as the casino sends it to them. This is why the casino needs your social security # when they pay you the winnings.
     
    • Like Like x 1
  15. jr7110

    jr7110 VIP Whale

    Joined:
    Jan 13, 2009
    Messages:
    1,022
    Trips to Las Vegas:
    28
    This is great information - thank you.
     
  16. Joe

    Joe VIP Whale

    Joined:
    Sep 11, 2009
    Messages:
    11,335
    Location:
    Wisconsin
    Trips to Las Vegas:
    175
    I couldn't agree more. This $ amount goes back decades but there is no way the gov will raise the reporting amount.

    Even though I wonder how many people actually pay taxes on 3-4 W2Gs w/o submitting off setting losses.
     
    Christmas
    My wife's birthday
  17. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    I'll bet there are a decent chunk of people who don't itemize who really get screwed. It wouldn't be for big dollars, but it might be big dollars for them.

    In a big city it is hard to imagine, but I can easily imagine people in less expensive parts of the country with lower wages and lower itemized deductions having an issue.

    For example, let's take your average welfare-to-work mom from Lincoln, Nebraska. Now that her twins father, Lawrence Phillips, is in jail, she is getting no child support, but she has worked her way up to head waitress at the Red Lobster by the Gateway Mall and is making a respectable $35,000 a year if you include her tips from stripping on weekends at The Night Before Lounge. She would always take the Head of Household standard deduction and get the maximum earned income credit. Let's say she gets drunk at a bachelor party in Omaha and decides to "let it ride" with her tips at the Horseshoe Council Bluffs to see if she can get enough cash for a new more symmetric boob job so she can recruit a respectable husband. Well she hits a royal and gets a W-2G for $4,000, just enough for those life-saving boobs!!!

    BUT, and this is a big ole butt, after the Iowa withholding and due to the fact she cannot deduct losses as a non-itemizer because she is on housing and has no mortgage interest, she must wait for her EIC check to get her boobs and misses her one opportunity at happiness.

    Totally screwed.

    The IRS is REALLY focused on keeping the service up to specs at Red Lobster and keeping the strip clubs stocked, which is an admirable social goal, but not really fair.:grrr::cry::grrr:
     
  18. Flopitbaby

    Flopitbaby Low-Roller

    Joined:
    Jul 8, 2012
    Messages:
    102
    Trips to Las Vegas:
    33
    Thanks again to all for helping out. I know how I will proceed based on all of your excellent input.
     
  19. S'AllGoodMan

    S'AllGoodMan High-Roller

    Joined:
    Mar 13, 2010
    Messages:
    562
    Location:
    CT
    Trips to Las Vegas:
    30
    Mine was an under reporting situation. I itemize deductions so claim losses against wins. I missed a w2 somewhere along the line and the IRS wanted their share from the win. In order to not have to pay more in taxes I had to send them something to show I lost more than I won. I printed off my win/loss statements and sent them in with my check for the required tax amount. About 9 months later I get a notice that my documentation was fine and heres a check for my refund plus interest.

    Reporting standards are not standard. It depends on the agent and the region. For a full audit they would want much more, but less than 1% of filers are audited. I know a real-estate broker who has a full audit every three years. It's happened 3 times. He should play mega millions.

    Beth
     
  20. Tbone3336

    Tbone3336 VIP Whale

    Joined:
    Sep 1, 2010
    Messages:
    1,442
    Location:
    New Jersey
    Trips to Las Vegas:
    21
    Thanks BeeeJay! even though I have been keeping detailed records for the past three years, this info is really good and an important detail that will help a lot of people understand it even if they do not have to worry about it.

    I setup a quick form outline in Notes on my Iphone and at each VP machine and or Craps table, I quickly notate the time, table and or Machine number, (all prominent and usually easy to see), my $ buyin and the denomination played. this takes less than 30 seconds to type in on my Iphone at each machine/table. Once I cash out I quickly notate the cash out amount. Once back in the room in Vegas on a several day trip or back home from an day trip to A/C, I update an excel workbook I created with the same form layout for each session and Trip. I also make pdf's or scan of atm receipts or withdrawals to show where my bankroll came from or if using a remaining balance from a previous trip.

    I know this sounds like a lot of work, but it really is not at all ( maybe a total of 1/2 hour for every trip total) and looking back over the past 4 years or records, give me insight into how much I really spent/won/gambled coin in, etc and shows some trends that I found interesting.

    Also in the past 2 years we have been semi lucky to have several W2g's and so far for 2013 we have 5 from Vegas and A/C so far. So far a positive year and if it keeps up, (yeah wishful thinking), would gladly pay the tax on the accumulated winnings at year end if we end up actually winning on the yearend totals. Never happened as of yet, but the wins have been nice and helped fund future trips so it is all good.

    Hope everyone gets many w-2g's and we all end up having to pay some tax at year end meaning we are all net winners!!