Tax on Winnings?

[faygo]

MikeA
 
The IRS(Government, Senators,Congressmen)(States on the bandwagon too) are used to getting free money. They want to make sure they get more than their fair share. Got to pay for their lifetime pensions and healthcare. (Ok that's about as political as I should get)
 
The $1200 threshold is ludicrous.
 
I have read were a $25 VP player will usually have  to have a casino employee sitting with them when they play to record the $1200 and over hits. A $100 player would generate one on trips. What a pain that has to be.
 
 
 

[stephmo]

I think that it is important to clear up the difference between a hand pay and a taxable jackpot. A handpay occurs when a machine hits a payment above a threshold that  a casino designates. In one casino in CT, it's $500(which, I personally find annoying).  However, this does not create a taxable event. A taxable event will occur only if a single hand(or a total combination of multiple hands on multiplay) wins $1200 at one time. Anything under that, including a single line 4000 credit royal,should not generate a W2G.

[MikeA]

I think that it is important to clear up the difference between a hand pay and a taxable jackpot. A handpay occurs when a machine hits a payment above a threshold that  a casino designates. In one casino in CT, it's $500(which, I personally find annoying).  However, this does not create a taxable event. A taxable event will occur only if a single hand(or a total combination of multiple hands on multiplay) wins $1200 at one time. Anything under that, including a single line 4000 credit royal,should not generate a W2G.Yep.  Good point.  A royal on a nickel machine will pay $200.  That might result in a handpay.  Some casinos set the threshold for handpay on these coin droppers at $50.  The floor people handpay (and hold out their hands for a toke!) but there is no W2G involved.

[cddenver]

The regulation that requires the casinos to file a W2G is something I think the IRS put into place to make sure they got their sticky fingers at least into the jackpots.  Of course when it was instituted (and I can't remember the year) $1,200 was quite a bit of money.  There have been attempts to get that value raised to represent a "jackpot" by todays standards.  But getting the IRS to do anything "smart" takes an act of God and I'm not seeing many miracles occurring here lately!

 
There's at least one way casinos can finesse their way past the $1,200/WG-2 issue.  Some of the casinos here in CO have their machines set so that a $1,200 winner actually pays $1,199.  An example of that is something like Four Aces on $1 WHA.  I don't know if the casinos do that for the benefit of the player, or simply to cut down on their own paperwork.  Perfectly legal, but I'm surprised that the IRS/state govt allows it.

[rascal]

Everyone on this topic is right on. I saw a woman run a machine up to $1600 and then play it down to under $1200 because "she didn't want to pay the tax." No amount of explaining would convince her otherwise. The only thing in VP that is taxable is a single push of the draw button that results in a $1200 or greater event, whether it be one line or 100 lines.
 
Contrary to information posted here, the IRS doesn't sweat gamblers who have good records. In my experience, they are easy to work with assuming you have basic records. A club card printout and a minimal daily journal (with machine numbers!) will usually suffice. As posted previously, all losses up to total wins can be deducted. Just about everyone does this. Do it.
 
Someone posted that the withholding varies from state to state. Absolutely. The state gambling taxes vary considerably. I play in different states and the withholding changes. In fact, there is such a change in certain states that it will actually influence the EV of a certain game. Federal taxes are constant from state to state, but if you are deducting your losses as you should, there is no federal tax at the end of the year.
 
On two occasions over the years I have had uninformed casino cashiers attempt to generate W2G's on non-taxable payouts. Going over their heads to management quickly solved this problem.

[rascal]

At higher denom's ($25 is a good example) the casino will supply a watcher if you guarantee to play a minimal amount in a given machine. The watcher has you sign "draft" W2G's as you go to eliminate long delays. In Laughlin one watcher might have four or five machines but it still keeps things moving along much faster than would be otherwise.

[bigboy]

Accumulated credit cashouts that exceed $1199 are not subject to W2G tax reporting. If a casino tries to issue you a W2G on a cashout exceeding $1199, get a supervisor/gaming commisioner. Federal law only requires that it be issued for a singular jackpot win that is valued at $1200 or more. Note though, if you are playing multi-line games(3,5,10,etc.), the total value of all winning hands is considered as one singular win.
 
Also forgot to add, that casinos are required to generate a report on your activity if your wins exceed $9999 in a 24-hour period. So, if you did attempt to cash-in 10K in chips or cashout slips(), they are required by federal law to identify you.

[shadowman]

Bigboy, I thought I read somewhere this value had been lowered recently.

[bigboy]

Bigboy, I thought I read somewhere this value had been lowered recently.
 
I think that you are referencing sports betting. I've heard something about  reports being generated for as little as a 3K cash-in. I'm not sure how it works for them.

[MikeA]

The only comments I've heard have been in reference to BJ.  The APs I know rathole big chips and cash them in at a grand or two at a time.  Since they do not ask for rating, there is no way to ID them or track their play closely enough to put a halt to their activity.  Anyway, they only hit a table for a half hour or so and during that time, are usually backcounting and only playing positive counts.