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Gaming Guru
Deal Me In: Different win amounts trigger traceable paperwork20 June 2014
The technical answer here, Don, is that any winnings, from whatever form of gambling worldwide, are taxable and must be reported as "Other Income,” on Form 1040, of the U.S. Individual Tax Return. This includes a sports bet, slot jackpot, even beating Uncle Louie at a game of tiddlywinks. Failure to correctly report your haul can result in serious penalties and headaches, that, believe me, you don’t want any part of. Never, Don, underestimate the desire of the IRS to get its hands on your moolah. It is a settled point of tax law that all income – whether legal or illegal – is taxable unless specifically excluded by statute. So, yes, even when Uncle Louie eventually pays you from the Super Bowl bet you had with him last year, “technically,” you must report that as income. In spite of what I just stated, we live in the real world. Reality says that 99 percent of people who win a few bucks here and there never report it. Furthermore, I haven’t met a person in the 35-plus years that I have been in the business that declares every nickel that dribbles out of a slot machine. Of course, there are individuals who keep meticulous, verifiable records to support their winnings and losses pertaining to gambling. This, by the way, is imperative if the IRS serves you with an audit. So, Don, what size of a gambling win triggers traceable paperwork? According to Uncle Sam, the payer must issue you a W2-G form if your winnings are $600 or at least 300 times the amount wagered. This would be representative of winnings from sports betting, dog racing, horse racing and state lotteries. Casino winnings are treated a little differently, as a W2-G must be issued and filled out by the casino if a bingo or slot machine win is above $1,200, or the net proceeds from a keno win are greater than $1,500, less the cost of the tickets bought on the winning game. Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-Gs are not required for winnings from table games such as blackjack, craps, roulette, baccarat, pai gow, etc., even if you won a decent chunk of change. Instead, the casinos are subject to the "Money Laundering Rules", and must report to the IRS, using a Cash Transaction Report (CTR), aggregate cash transactions of $10,000 or more by any player, in any one given day. So how do you completely avoid taxes? Stop gambling! Wait! Hold that thought. I just noticed that the current odds on the Detroit Tigers winning the World Series are 10/1. I’ve got to get me some action on that. Gambling Wisdom of the Week: “The pure sensuality of the betting moment... It is a neurological jolt made up of greed, lust and excitement mixed together with a strong dose of fear.” – Edward Allen, Penny Ante (1992) Recent Articles
Mark Pilarski |
Mark Pilarski |