Taxes on tournament winnings

[toolman1]

I've treated W-2Gs and 1099-MISC forms as the same for years with no problem. (When the 1099s are gambling related of course!)

I use TurboTax to prepare my return. They ask for gambling winnings reported on 1099 and W2G in separate parts of their interview. However, when the return is prepared they combine the 2 and list the gambling winnings on line 21 as "other income". They make no distinction between the two methods of reporting for the purpose of deducting gambling losses. Gambling losses can then be deducted against the TOTAL gambling winnings (1099 & W2G) on Schedule A according to Turbo Tax.

NOTE to Billy C:
Illinois does the same as WI. So you are not alone in your anger. As a matter of fact, in Illinois' Tax Booklet it states in large capital letters that gambling losses are not deductible. How do you like that for being fair? :flame:

 

[ANDY 956]

Playing tournaments abroad

How does the tax system work when you win money in a Blackjack tournament outside of the USA?

For example how would the tax be worked out if an American player won the UBT European round in Paris France?

I can’t see the French casino staff handing out any of those 1099-Misc/W2-G forms.

So do you have to pay any taxes on your winnings abroad, and if so, which country would collect the revenue?

Just curious about how it works.

Andy

 

[TXtourplayer]

33% off the top...

Lets say a Canadain win's a tournament in Las Vegas. The casino is required to deduct 33% right off the top before awarding the prize money to them. (at least that is what I have always been told by the player and casino staff, I suggest you ask BJFAN about this situation.

Now over in Europe I'm not sure how taxes would be handled. In Canada should an American win, I always heard they got paid everything, again this is all hear say on my part, am not 100% sure, just what I've been told. Vince Costa would be the player to ask about that having won the Canadain Masters back to back, he would know.

Maybe Ken can ask him that question this weekend at the Masters event.

 

[Archie]

Curious...

We get to play BJ and poker on the internet until our fingers go numb and cash transfers to and from gambling sites to Neteller take about 48 hours. Oh, did I mention that all gambling winnings from lotteries, land based casinos and the internet are legally tax-free? If I did not live here already, I would move! LOL.:joker: :joker: :joker:

Do you know if Canadians can recover that 33% deducted from their winnings in the States?

 

[BJFAN4]

Taxes on gambling in Canada.

Canadian casinos always issue the whole amount to the winners regardless of nationality. It's up to the individual to handle the tax obligation as he/she sees fit.

 

[LeftNut]

Canadians and gambling winnings

If a Canadian wins a jackpot or similar in the U.S., and has the withholding done, I'm 99% sure that it can be recovered by filing a specific form with our I.R.S.

As BJFAN4 said, if an American wins a big prize in Canada, it is paid without withholding taxes. Plus, it isn't reported to the I.R.S., so it's strictly the honor system for the taxpayer. However, the I.R.S. will get extremely nasty with you if they find out.

For a few months Casino Windsor had the Metro Detroit area just wallpapered with billboards advertising Tax-Free Jackpots. That didn't go over very well with the anal-retentive State of Michigan tax collectors, nor the I.R.S., and those billboards quietly vanished.

 

[toonces]

As BJFAN4 said, if an American wins a big prize in Canada, it is paid without withholding taxes. Plus, it isn't reported to the I.R.S., so it's strictly the honor system for the taxpayer. However, the I.R.S. will get extremely nasty with you if they find out.

For a few months Casino Windsor had the Metro Detroit area just wallpapered with billboards advertising Tax-Free Jackpots. That didn't go over very well with the anal-retentive State of Michigan tax collectors, nor the I.R.S., and those billboards quietly vanished.

Actually, they got around that with some very subtle billboards. The new billboards' tagline was "RELAXING, NOT TAXING". They left the subtle wink to the reader.