Ask The Slot Expert

John,

Just read your column regarding gambling taxes. Could you elaborate on the situation of using the standard deduction? From what I have read it is a mess. Some say to just add your W2-G's to your other income and take your standard deduction. I realize that you are not in the tax business, but perhaps you could refer reader to good information.

Royals,
Dick

Dear Dick,

I don't think you have much of a choice but to add your W-2Gs to your other income unless you qualify as a professional gambler.

I know of some people who have successfully reported a net income figure in their Other Income instead of the total of their W-2Gs. They, of course, had an overall profit from gambling and that may explain why their returns were accepted. By the way, I think this is the way it should be. We should be reporting our net gambling win in Other Income, not this artificial W-2G gross.

As for the standard deduction, if the total of your gambling losses plus any other deductions you're able to take is less than the standard deduction, you take the standard deduction. So, you get hit again. Your taxes get increased by having to report the W-2G, but your taxes don't get decreased by being able to deduct your losses.

My book The Slot Expert's Guide to Playing Slots has some information about taxes in it and I believe Jean Scott's new book will also cover taxes. The best advice I can give is to get a good tax preparer to do your taxes and, if you have significant gambling income, ask around on the Internet newsgroups for a preparer who specializes in gamblers' returns.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net.

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