Video Poker Forum

So a quick discussion topic. When do you have Fed Tax taken out of your hand pays? Just curious as to others opinions and how they withhold.

After being killed by taxes a couple of years ago, we opted to go with having Federal taxes taken out on any hit of $2,000 or more.

Never had enough W2-G hands in a year to justify having taxes withheld.

I don’t have Fed taxes withheld because even though I get crushed from the tax changes in 2018, I am forced to itemize and write off the Gross Winnings from the front side of my return as an itemized deduction. Note, I have never yet had a winning year. However, I do have the max 7 percent withheld fir Ct State tax. They steal that from us by taxing on Gross Gambling winnings which become a part of one’s AGI. Ct income tax is based on Fed AGI. What a bummer. No writeoff ability at all like with the Fed.

We do not withhold fed taxes on hand pays.

I wait until a certain cumulative total is hit and then I'll have taxes taken out.

I try to have the standard 24% fed and 3% NJ taken out, but sometimes in the past I have forgotten to say so, or thought it was automatic unless otherwise specified. Depends on how much the hand pay is also, less than 1500 and negative I will specify no withholding; 4000 or more, definitely having taxes withheld.

I try to maintain enough withheld to cover the "income" so it will be there for when the return is filed. As the end of year approaches, I have an idea of my liability and what tax bracket I will fall in. Of course I consider the gambling income is on the top and as such may be taxed at the higher rate so all the more important to have the 24% taken out. I may request 33% w/h if it warrants or I am in arrears.

The whole thing is a pita. File a NJ1040 non resident, then apply for PA credit on taxes paid, blah blah blah. I actually had both PA and Jersey W-2G's last year. If I had a better log for 2020 I may have itemized but couldn't find my data on Jan-Feb. The way things are in 2021, I am in good shape to itemize in excess of standard deduction and be able to write off all (miniscule) winnings. Of course "good shape" meaning that I'm really in bad shape.

Triple Triple,
We have a similar situation, since we play La. and live in Texas we have to file La Non-Resident taxes and get a refund. In the past, we got all La. returned after we filed our taxes. Then La changed to base withholding on our Federal Tax amount AGI. We use one of the major tax software companies. They now quickly fill out both Fed and La tax forms for us and e-file. This is so much simpler than when we would have to have a La. CPA/tax preparer fill it out for us.

Olds,
Yeah, the AGI has killed us on the front end several times. The worst point is that if screws up our Medicare premiums for two years until our AGI comes back down.

PS It really hurt to have that Fed taken out this past weekend. The $3K was a small amount after a long cold run. Getting barely $2k was a bankroll killer, especially when we share bankroll.

LL

LL you raise some interesting points.

In your response to TT you mention La non-resident state income tax. Our accountant uses a similar software package to do our taxes. I think the threshold for getting all La state income tax refunded is around $12K. Receive more than that in w2gs in a given year they keep some of it. Not sure of the exact formula. Do other states besides La allow for filing to get some or all of your state income taxes back?

In your response to olds you mention the effect of gambling w2gs on AGI and medicare premiums. We are just a few years away from receiving medicare. If you receive for instance $10K in gambling w2gs in a given year, how much higher does this make your medicare premiums?

I am curious with your decision to withhold fed income taxes from your w2gs. If you have adequate savings in place, which I am sure you do, why would you fork over taxes any earlier than you have to? Are there some other factors that went into your decision?

I never have feds tax withheld from handpay jackpots. I overwithold on my paychecks - to make sure there are no nasty surprises come tax time. I guess I could go married 4, but withold single 0.

Indiana takes their 3+% automatically and that is not recoverable.

Before the tax change, I always itemized and had losses to offset - no biggie.

The first year of the new system, I had $20+k of jackpots and losses and could itemize.

Last year I got boned on taxes - $10k in jackpots and due to Rona, casino time was limited. House paid for and not enough other SALT type stuff to itemize.

Lucky Larry wrote: ↑

Wed May 19, 2021 9:05 pm

So a quick discussion topic. When do you have Fed Tax taken out of your hand pays? Just curious as to others opinions and how they withhold.

After being killed by taxes a couple of years ago, we opted to go with having Federal taxes taken out on any hit of $2,000 or more.

I never do. I make adjustments to my work withholding later in the year when I see where I'm at compared to the last year.