I don't know if there are any accountants among us, but I have a question regarding including the tournament prizes while filing taxes. The Casinos usually take your Drivers License Number and SS number if you win anything at the end of a tournament. I believe these are reported to IRS. I haven't yet, but if I win 10,000 dollars in a tournament, do the casinos take taxes out of it right there on the spot or do I have to show that as a gain and file it in my tax returns.
That is a good question. I was once told that because you have paid a entry fee to get into the tournament, that you do not have to pay taxes. Last year I won two tournaments. A $2,000.00 prize, and a $300.00 prize. The Casino paid me cash for both and I didn't fill out any forms. I am not sure if I need to pay taxes or not. I will have to ask my accountant at tax time. Does anyone else no? Thanks, Slim
Taxes are due regardless All gambling winnings, regardless of whether they're reported with a W2G are taxable income. But, you probably knew that already. The initial question was really more along the lines of: Will these wins be reported? I don't think the IRS gets a tax form unless you get a copy of it. That is, despite them taking your SSN, if you don't get a copy of a form either then or early the following year, nothing is sent to the IRS. Most casinos that will report the win will give you a W2G immediately, though some will wait until the end of the year and send you a 1099-MISC. Why the differences? There is disagreement among casinos on whether tournament wins are subject to W2G reporting. For example, Grand Tunica once issued W2Gs to semifinalists in their tournament, who just won their entry fee back! Other places won't issue a W2G to anyone in a tournament, even if they win $100K. The reason for the differences is that the law is somewhat ambiguous and they choose to interpret it differently. I've actually had federal taxes withheld from a $10K win before. They paid me $7200 I think, withheld $2800, and gave me a W2G. That was long ago, at the Isle in Biloxi. I don't think at the time I was offered an alternative. However, when I won the same event the following year, they didn't withhold anything but state taxes. For another angle, I know that some of the MGM Mirage properties have begun to pay the winner in promotional chips, which must be wagered at the regular table until they are lost. Essentially, you have to play long enough to swap them for regular chips. I suspect that this may have been a move to eliminate any tax forms, along with their obvious desire to get the prize money in action.
Fun with Taxes! The great thing about paying taxes on gambling winnings is that you can also claim gambling LOSSES as well, as long as you keep some rough documentation as to the date, location, and nature of the loss. Unfortuneately, you cannot claim gambling losses that total MORE than your winnings -- which in my eyes is pretty unfair, but it does prevent people from making up huge "losses" every year to offset tax liability. Where tournaments are concerned, the greatest "loss" of all is the buy-in. Always, always get a receipt for the buy-in. As an avid poker tournament player, I have well over 100 receipts at the end of the year that add up to a surprising "loss" -- of course, this is offset by the reportable wins i have. Even if you play only a few tourneys a year, keeping receipts is a very easy, & very necessary, thing to do. Playing online is even easier -- at the end of the year, you should be able to get a win/loss statement that shows the total amount of deposits & withdrawals into your account. A questionable area exists in terms of money deposited but not yet gambled; ie, if you have 10 grand in your account, it is technically "gambled away" since it is off-shore & not in your immediate possession (like it would be in a bank account or mutual fund); however, this type of blatant tax evasion is best left alone. A question for you, Ken -- how are you handling your WSoBJ win from Mohegan Sun? I wonder if we can truly call that "gambling income" since for all intents and purposes, it is considered "game show winnings," a different type of income that cannot be offset by potential gambling losses. Have you looked into that yet? -holly d.
Withholding taxes A casino cannot and will not withhold winnings from table games or table game tournaments (I'm not sure about slot tournaments), unless you ask or agree to let them. An exception is if you're not a U.S. citizen then I believe 37% is taken right of the top. The IRS is not a goverment agency as most think. The IRS actually was started and owned by four familys to do the tax accounting for the U.S. goverment. After several lawsuits filed against them the casinos stopped taking taxes out (on table games). You may have heard that the IRS stopped most of their seizures as well due to getting sued (which by the way they lost).
IRS not a government agency? My estimated tax payments and final payment April 15 each year are made payable to the "United States Treasury" which I presume and have always believed to be a USA agency. Many people have contested the legality of income tax in court and all have lost to my knowledge. If I misread you'r post please correct me.
My point Who do you send your check to? Not the IRS, but to the U.S. Treasury, why because the IRS works for the U.S. goverment, not that they are the U.S. goverment. If H & R Block does your taxes the goverment doesn't sent your check payable to H & R block do they? And to correct you the IRS has not only gone to court, they have lost several times and been proven that some of their seizures were and are illegal.
Taxes I'm not sure of your point, the money(taxes) goes to the same place (US Government) whether the money is paid to IRS or UST, i presume money payable to either is the same (taxes due), are you saying i can avoid taxes because the IRS is not a governmental agency but a 4 family institution to collect taxes, lol that was a joke, i don't beleive you meant that
My point No, I never said don't pay taxes or you don't have to pay taxes. And The U.S. Treasury and the IRS are not the same. The goverment does get the taxes not the IRS. My point is the IRS to the goverment is like H & R Block is to us. They handle the taxes for the goverment. Without getting into what is legal and not as far as taxes are concerned, let me remind you of one of the main reasons why we fought the British for our freedom, "Taxation without representation", remember the Boston Tea Party? Read the U. S. Constitution and see how our laws are set up as far as taxes are concerned. It makes for very interesting reading.
Here's what the IRS sez: Code: Generally, gambling winnings are reportable if the amount paid reduced, at the option of the payer, by the wager is (a) $600 or more and (b) at least 300 times the amount of the wager. However, these requirements do not apply to winnings from bingo, keno, and slot machines. Gambling winnings for these games are reportable if: * The winnings (reduced by the wager) are $1,500 or more from a keno game. * The winnings (not reduced by the wager) are $1,200 or more from a bingo game or slot machine. If you pay reportable gambling winnings, you must file Form W-2G with the IRS and provide a statement to the winner (Copies B and C of Form W-2G). Here’s a link for the above quote and other info Form W-2G Instructions So, for a tournament the winnings must be 300 times the entry fee to be reportable. The only tournament I know of which qualifies is the Hilton Million. And Hollywood is probably right in that this rule would not apply to the WSoBJ since it is invitational and the entry fee is zero, thus you are not making a wager. However, last May at Turning Stone, the tournament director announced that all who reached the final table would have to fill out tax forms if they wanted to play it. But Indian Casinos are a whole ‘nother bag; maybe they have special requirements. If so, I couldn’t find it in a search of the above site. Perhaps ThePitMgr can weigh in here. What say you boss? ptaylorcpa might shed some light also. --jr
Taxes OK, after this TX, Im done stick a fork in me, there is no difference in the IRS and UST(both are USA Governmental agencies) except the name which was recently changed the past 2 years to make tax payments payable too. I don't really understand your comment about a tax refund due me going to H & R Block instead of me if they prepared my taxes (which they don't)
Irs TX, Posted my last message before i read your last post and we aren't that far apart in our opinions, from an Arkie to a Texan the only thing between us now is Oklahoma, maybe meet you in Tulsa or vegas someday, gonna be in vegas 3/7 to 3/11 05, if you're gonna be there then will buy you a Big Mac. Chuck
Better meeting Rookie789, lets meet in Vegas in May for the MD III finals. Let me be lucky enough to win the Million and I don't care who's name is on the taxes, I'll be laughing all the way to the bank...LOL.
IRS rules on withholding Jackaroo has summed up the withholding issue pretty well with the copy from the IRS website. If you go there (www.irs.gov) and do a search on blackjack, it narrows down the items returned for you. Here is a good summary on withholding requirements for various gambling related issues. http://www.irs.gov/businesses/small/industries/article/0,,id=99609,00.html I tried copy and pasting the info, but since it is a table it gets all jumbled up, so you need to go to the link to read it. Basically the IRS mainly is concerned about reporting of slot, bingo, keno and wagers where the winnings are over 300 times the amount bet. Indian reservations have their own set of rules, so they might be withhold depending on their charter, since you technically are a "Foreigner" unless you are one of their tribe. Tournaments are unique. If there is no entry fee they are supposed to give you a 1099 if you win more than $600. It is vague on what happens if there is an entry fee (if the 300 times rule applies). I think in most cases I would think they would give you a 1099, without any withholding. In my opinion, winnings from tournaments should be treated as any other gambling income. (You should be able to reduce your winnings by losses. There is no requirement that you have to specifically identify each event separately, ie: offsets only allowed for losses during a particular event or trip, you get to aggregate all your winnings and losses together as one number.) Normally winnings are reported as other income and losses are shown as itemized deductions on schedule A. There is no 2% threshold for gambling losses, but if you don't have enough itemized deductions then you are out from being able to deduct your losses. Things get more fuzzy if you want to run everything as a schedule C, business income or loss. The IRS will challenge you on whether you are truly gambling with the expectation of making money. If you don't show income periodically then they will say it is just a hobby and go back and disallow the losses in excess of winnings. If you want to go the "professional" route, be sure to document everything very well and be consistent with keeping records and showing plans for how you expect to "earn" income. Also it is a good idea to treat it like a real business, separate your bankroll from your personal expenses and keep a regular set of books on the gambling activities. Regardless of whether you get a W-2G or a 1099 or not, to avoid any problems, report all winnings. Keep a record of net wins or losses for each session. In any audit, the better your records are, the less problems you will have. Hopefully we will all have a tax problem from all the winnings in excess of our losses!
W2G's I complained to John Ascuagua's Nugget in Reno about the W2G that they issued to me for a $2500 blackjack tournament win. Their accounting department agreed with me and voided the W2G.... On the other hand, the Imperial Palace would not void out the one that they issued to me for $20,000. The Las Vegas Hilton did not issue one for the $12,000 craps tournament winnings. Pioneer in Laughlin changed from one tournament to the next... first no W2G for $4500 then they turned around and issued one for my next win of $11,000. Circus Circus took everyone's ID's, made out W2G's and then some casino authority came along and tore them up before they handed them out. There is no standard. I talked to a tax attorney......... The IRS instructions are a guide line for what the casino MUST do for table winnings; i.e. $600 and 300 times the wager... The attorney stated that a casino can voluntarily issue a W2G for any table tournament winnings over $600, period. This is the case with Binion's (Las Vegas) and their daily poker tournaments. They issue W2G's for net winnings over $600 (winnings minus the entry fee).
Calling All IRS Agents Is this we we post our resume for our winnings.How did one question turn into one BIG W2-G :laugh:
W2G's Aw shucks Joe, I was only trying to point out that every casino interprets the IRS guidelines differently on issuing W2G's and 1099's. Case in point: Sunset Station here in Vegas was taking down names and social security numbers from the final table at their BJ tournament all last year. We were told that it was only for their office 'survey'....... Well, my 1099 came in yesterday's mail. My puny little 'resume', as you called it, could never hold a candle to your great accomplishments in the tournament world. I have always considered you to be a great player and I have thoroughly enjoyed watching and learning from your play. I have never expressed anything to the contrary. Don't try to make me your next soap opera word game victim.......... I'm much too old to play little children's games.
never to old Faye I always consided you one of the "BOYS".No harm no foul,if i rib you i like you.If i pay you no mind then that's a problem.You or anyone is never to old to play.Remember when you stop laughing you die.You have always been very nice to me and who else gives my cough drops when I need them. Thanks for the kind words . Damm you Hollywood you said she could take it now look the mess you got me in "OLLIE "
Ribbing Okay 'Stan'..... I can only attribute my reaction to the fact that the wax in the middle of my 'both ends burning candle' must be getting too soft. Working all day and staying up half the night, with my latest challenge of poker tournaments, must really be taking a toll on my already fragile emotions. No no........... not one of the BOYS, please let me keep the cleavage and just be one of the PLAYERS............ Check out the results (Poker Player magazine) from one of the Grand's Poker tournaments in Tunica (my little side attraction while down there for Bally's Blackjack Tournament). I'm learning................. The best part was that I got in through a $130 satellite. Ante Faye
Much to young for me Clevage i never look when women are younger than me .Being one of the guys is a good thing.Congrats on you poker cash out
