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W2G offset deduction question

Discussion in 'Casino Gaming' started by HuskerBB, Jul 24, 2018.

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  1. HuskerBB

    HuskerBB VIP Whale

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    Happy problem here. Hit a Royal on VP last weekend at my local casino so got a W-2G. Have had these in the past and took an itemized deduction for other gambling losses. This year with the new tax bill increasing the standard deduction and limiting state and local taxes to $10K I will not itemize on my 2018 return. In fact I purposely front loaded charitable and other itemized deductions in 2017 just for that reason. So am I SOL in terms of offsetting this W2G income with gambling losses? Anyone have an argument for taking that deduction as a direct offset without itemizing deductions?
     
  2. Joe

    Joe VIP Whale

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    Yes you are SOL unless you reach that $24k itemized level for married or 12K for single filers. Not completely sure what you mean by direct offset?

    In 2018, I have become even more charitable to offset my W2gs. :D
     
  3. danny8235

    danny8235 MIA

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    What $$ do you have to win to receive a W2 on VP
     
  4. Joe

    Joe VIP Whale

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    Anything over $1,199. You still might get paid by hand, but if less then $1,199 there will be no W2G. Of course you know you are supposed to report all gambling winnings, whether a W2G is generated or not. :poke: ;)
     
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  5. merlin

    merlin MIA

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    I think you're out of luck, my suggestion is you get more w2g's(enough to put you over the itemized limit), then you can offset at least a little. For example - get 40K in w2g's, then offset perhaps 16K, you'll feel like a winner.
     
    Last edited by a moderator: Jul 24, 2018
  6. Chuck2009x

    Chuck2009x VIP Whale

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    Basically. No idea what you mean by direct offset. You have to claim the W2-G amount as income same as before. You can itemize losses against it, but it doesn't make sense to do it unless including that one line item deduction pushes you over $24k.


    Example:
    You have $17,000 in still-allowed itemizable deductions. But you take the $24k standard deduction because it's more.

    If you had $8,000 in W2-Gs and a net loss for the year:

    Now you have $25k in deductions instead of $24k, so it makes sense to itemize. But, you're only really effectively offsetting $1,000, and still paying tax on the other $7,000.

    If you only had $5,000 in W-2Gs, you could go ahead and itemize and offset the W2-Gs with losses, but now your total deductions would only be $22k, so there's no reason to do it.
     
  7. meyers67

    meyers67 VIP Whale

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    Direct offset? I believe you can do that only if you are saying that your gambling is a business. Very difficult to do if you are just a recreational gambler.
     
  8. HuskerBB

    HuskerBB VIP Whale

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    With the 10K limit on state taxes and our house paid off that leaves $14,000 of room before itemized deductions do you any good under the new tax law. That is why I set up a donor advised fund to essentially prepay charitable gifts when I could still deduct those in 2017. I knew at the time it probably meant I was screwed if I got a W2G this year. It is just $4k and doubt if I hit another this year so I guess I just pay the tax without any offsetting deduction. Sucks because my last trip to Vegas was a bad one in terms of gambling so until this I was clearly behind for the year. Somebody needs to lobby Congress to make the gambling loss an above-the-line (non-itemized deduction) to the extent of gambling winnings. (Like alimony was under the old law). Otherwise the doubling of the standard deduction is bad for gamblers. Really sucks for those of you who play a lot on machines and end up with lots of W2G's each year. I only get one when I happen to hit a Royal in VP (this was my 3rd one lifetime).

    My other solution is to tell my wife we need to get a divorce before the end of the year so we can file as single and both get the 10K of state and local tax deduction :) That would save us $2-3,000 in taxes - which would pay for a nice honeymoon trip to LV to get remarried in 2019 :).
     
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  9. Joe

    Joe VIP Whale

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    The law isn't rolling back in 2019.
     
  10. Grasp

    Grasp Low-Roller

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    This is incorrect. You could, and still can, offset winnings with losses on federal taxes when you itemize. States taxes very heavily by state. As already mentioned, the new tax law bumps up the standard deduction so much that many people who previously itemized will no longer do so.
     
  11. meyers67

    meyers67 VIP Whale

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    You are correct. But I was answering a different question from the OP.
     
  12. Grasp

    Grasp Low-Roller

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    You're right, I completely discounted that part. Hence your original reply. My bad!
     
  13. Chuck2009x

    Chuck2009x VIP Whale

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    I still don't know what OP meant by direct offset. What do you guys mean by direct offset?

    This is what OP said:
    If he means simply reducing or zeroing out the W2-G amount reported on Line 21 as income, the answer is nooooooooooo. The IRS is going to match up that Line 21 (or what used to be Line 21) with your W2-Gs and if it's not the same or more, you're gonna get a bill.

    As far as professional gamblers, the tax law changed in that someone who met the criteria for a professional gambler used to be able to deduct both losses against winnings, plus other expenses related to gambling. So if you broke even on actual gambling, your related expenses could offset other income.

    Now they can only deduct both up to the amount of winnings. So if you break even on gambling, you can't use your expenses anymore. if you end up +$1,000 on gambling, you can only use $1,000 of your expenses to offset it, etc.
     
  14. nostresshere

    nostresshere Mr. Anti Debit Card

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    Sorry. for so many people, any W2-g will become fully taxable. Going to be lots of surprises next spring (except for people that don't understand any of it-LOL)

    Totally wrong, but that is the way it is.

    And, if you are older and paying for your own health insurance, and the W2-g takes you over the income level for subsidized insurance, you will get screwed again. And no drink, no dinner, no movie either.
     
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  15. Joe

    Joe VIP Whale

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    One of the rarely mentioned consequences of the new tax law.
     
  16. merlin

    merlin MIA

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    Well, it was mentioned here, each of us "should" evaluate our own tax situation, and if necessary make changes to the way we gamble. It's like everything else in life, preparation, planning, discipline, these are the things that make a difference.
     
  17. Joe

    Joe VIP Whale

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    @merlin Mentioned here because we have so many savvy people. :D I was referring more to the general public and the media.
     
  18. danny8235

    danny8235 MIA

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    What if I hit a $1000 hit on VP triple play
    Is it considered $1000 or $3000 winner
     
  19. merlin

    merlin MIA

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    It's per spin, so If you hit a 1K payout X3, that's 3K, w2-g issued.
     
  20. tringlomane

    tringlomane STP Addicted Beer Snob

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    You'll get a W2G if you get 2 or more Royals in one play. If you just hit a Royal on only one line, you'll generally be below $1200. And if you aren't, you're a lucky bastard for hitting that possibility. E.g. Royal and 4 Aces+ on DB, DDB, TDB, etc.
     
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