Paying Tax at American Casinos

[AussieGambler21]

I wasn't really sure where to post this so please move to a more appropriate section of the forum if need be.I couldn't find a real suitable section to post this but would like peoples thoughts and ideas on the matter.

I am thinking of moving to the US but don't like the idea of paying tax on my gambling wins so i was just wondering how much tax the casinos actually take out of your gambling wins, if you can claim tax refunds on this and generally how much of an effort it takes to declare your winnings and losses to the IRS?

I would love to move to the US but the taxes on gambling is probably the only thing that is really stopping me from going any further with the idea however i don't mind paying taxes as long as they are reasonable.You also have to bear in mind i come from a country where all gambling wins and losses are completely tax exempt.

So please give me your opinions.

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[silcnlayc]

I claim my losses to match any winnings. You cannot claim losses beyond that. Taxes are based on your net income after deductions so in realty, you do not pay taxes on gambling if you can claim the same losses.

The only time I had any taxes taken from my winnings was when playing the horses and I hit over $5000 on a race. They took a third out but I got that back when I filed taxes.

What was strange, the casinos never took a dime of my $6000 win for taxes but the online horse racing did.

I claim all wins at casinos and offset it with my losses there too. They keep track of this nowadays and you can get a statement online from your account to file with it if you need to nowadays.
.

 

[vegetagirl2008]

Actually the casinos do not take out anything. What they do is they ask for your social security number if you win a certain amount then they provide you with a w2 to give to your tax preparer. But playing online I really don't know about that one. But I know that I have to report any winnings to the IRS.

 

[dalzilla]

Taxes on winnings. couple of examples

At the Oklahoma Native American owned casino I play at a couple of times a month, here were my options on wins of 1200.00; I could take the full amount and pay the taxes later or they would withhold the taxable amount up to 20%then issue check for the balance. I took the latter option so I didn't have to worry about the taxes later. This has happened a few times and each time I did the same. Was issued a W2-G that came via mail showing gross and net with taxes withhold. I've never gone above a $1000 win on a table game so I don't know the situation there. Now... I would like to go above $1000 on table game

In Las Vegas if the RNG was spitting out winning symbols, I played up to the $1199 limit and cashed the tickets separately. Ditto for Reno gambling.

 

[littlebit]

At the Oklahoma Native American owned casino I play at a couple of times a month, here were my options on wins of 1200.00; I could take the full amount and pay the taxes later or they would withhold the taxable amount up to 20%then issue check for the balance. I took the latter option so I didn't have to worry about the taxes later. This has happened a few times and each time I did the same. Was issued a W2-G that came via mail showing gross and net with taxes withhold. I've never gone above a $1000 win on a table game so I don't know the situation there. Now... I would like to go above $1000 on table game
QUOTE]

When I would go to Louisiana to play at the casinos there, the same option was available. In Louisiana, they also automatically deduct state taxes before you're paid, which will be refunded if you aren't a Louisiana resident and file the proper tax form with the state.

 

[LaurieJim]

This a off the wall ? and maybe one of you might know the answer.........If your a non resident and play at a out of state casino(tunica) alot for the past 9 years and have had state taxes withheld (mississippi) is there a way to recoup those or is that just giving money to the state, there are no state taxes in tenneessee, but i know over the last 9 years i have had several k's withheld in mississippi taxes..................... sorry for the derail o/p but littlebits post has me wondering.............laurie

 

[AussieGambler21]

..................... sorry for the derail o/p but littlebits post has me wondering.............laurie

No problem laurie , i would be keen to know too as i would like to find out as much information as i can about taxes on gambling wins in the US before i make any final decision on whether to move to the US or not.

Thanks for all the information so far too everyone

 

[Jasminebed]

Just wanted to add that we do not tax gambling winnings in Canada either. If a Canadian resident wins over $1,200 in a US casino, the casino makes a withholding, and you apply to get it back once you are home.

 

[Mousey]

This a off the wall ? and maybe one of you might know the answer.........If your a non resident and play at a out of state casino(tunica) alot for the past 9 years and have had state taxes withheld (mississippi) is there a way to recoup those or is that just giving money to the state, there are no state taxes in tenneessee, but i know over the last 9 years i have had several k's withheld in mississippi taxes..................... sorry for the derail o/p but littlebits post has me wondering.............laurie

I live in Alabama and play @ Tunica. As far as I know there is no way to recoup that tax they automatically withhold on $1200+ hand pays.

To the OP:

I. Nelson Rose

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Also go to the MeisterMall (amazon) Old URL and look for a book entitled

Tax Help for Gamblers by Jean Scott.

 

[anniemac]

I have won at Louisiana casinos also and they asked me whether I wanted withholding taken out. You have the option of saying yes or no. I always had enough deductions that I did want them holding out withholding. They do take out SS taxes and state taxes. Then you have to file a state tax return to recoup the state taxes they took out. You will get all of the state tax back as a refund. So I would expect that if Mississippi has a state tax, then you would just file a state return and get it back. It's no big deal. Get the form off the internet for the state, fill it out and attach copy of your Fed. return and send it in. Never had a problem.

If you keep your wins below the tax limit, then you won't have to do anything. The couple of times I had to file was when I hit a jackpot.

 

[alternative_inv]

Tricky subject

Some good info in the above responses, but in some cases it may only be partially correct.

I know that Oz doesn't typically come after or track gambling winnings but I thought they told the guy who won the World Series (Joe Hashem?) that he got a pass for his first win because he was not a "professional" at the time, but would have to pay in the future if he was considered to be a professional gambler.

As others have pointed out, the US has federal income tax with some states also having a state income tax. Although you are suppose to self-report, I don't know of anywhere that reports or withholds on table game winnings, but slot jackpots ($1200) and other large wins (keno, horses, etc.) are a different story. These are reported to the IRS on a W2-G (or 1099 in some cases). If you don't have a SSN or TIN, then you will typically have ~30% withheld. Some countries have a tax treaty with the US that may allow you to recoup this withholding even if you don't have losses to subtract against the wins. Not sure if Australia has this sort of tax treaty, but I know that France does.

How you are taxed federally depends on whether you are a professional or recreational gambler.

Gambling winnings of US residents/citizens are subject to federal income tax, but recreational gamblers do not have to pay social security/medicare taxes on winnings. However, they can only deduct gambling losses to the extent of their winnings as an itemized deduction on form 1040 schedule A. Gambling related expenses are not deductible. The disadvantage to showing gambling winnings as part of your taxable income and taking losses as an itemized deduction is that you may lose out on your standard deduction (fi you were not already itemizing) and it may bump up your adjusted gross income (AGI) that leads to phase outs of certain deductions.

Professional Gamblers show winnings on a schedule C and can deduct all losses and expenses as part of the schedule C. The disadvantage to filing as a professional gambler is that you have to pay social security & medicare taxes on your net schedule C figure. This is on top of federal income taxes and is about 15.2% on the first ~90 K and then about 2.9% (medicare only) thereafter. In theory, the social security taxes paid help bump up the payment you would receive when you retire, but this is another subject.

 

[alternative_inv]

A couple of other things...the record keeping required by the IRS is really no more detailed than a serious player should be doing anyways. However, in 15 years as a professional gambler (both personal and manager of a large team), I have had to deal with numerous IRS notices as well as 1 personal and 2 company audits that were directly related our gambling activities. None of these resulted in additional taxes owed (we have keep detailed and honest records of all wins and losses), but they have been time consuming.

FWIW, I had no issues when I only played BJ (and kept transactions under 10 K)...it was the reporting of machine JPs that raised all the red flags.

Whether you should move to the US or not really depends on where you think you would prefer to live and where you think you might have the best opportunities...as an example, I would much rather make 300 K a year and pay 35% tax than make a 100 K a year tax free. I don't know your exact situation, but I would say a move to the US would be fine if your winnings are of the type that stay below radar or if you could increase your above radar winnings enough for the extra hassle. Not sure if this matters to you, but if you play online, you may not be able to access all the same sites with a US address (not that there aren't some ways around this).

 

[BLUEWATER]

Most casino required you pay taxes if your winning is $1200 or more. You can request to withheld taxes so you don't have to pay later. Play at the table you don't have to pay taxes. More Info at this link.

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[gloria460]

I won 3600 at the Hard Rock in Tampa. I received the whole amount but when tax time came around I was hit with a 900.00 tax and no the loss of 3600 did not offset the tax...I ended up owing that year. It was on slots so they take roughly 25% of everything over 1000.00 here.

 

[me_and_ed]

I won 20k 2 weeks ago playing Mr Big Boss ($2 bet ) in Washington State at Skagit (Native), the took 6k off the top, I am now trying to get my losses from the winners club to try and get back this money. BTW I am in Canada.

 

[RobWin]

I won 3600 at the Hard Rock in Tampa. I received the whole amount but when tax time came around I was hit with a 900.00 tax and no the loss of 3600 did not offset the tax...I ended up owing that year. It was on slots so they take roughly 25% of everything over 1000.00 here.

Gloria, you definitely need to find yourself a better tax accountant based on what you said above. Re-read Silc's post again too..

 

[Darem1]

Additional tax information regarding American land based casinos

I wanted to clarify a couple of the above postings. First of all, in order to claim losses to the extent of winnings you have to file schedule A along with the 1040. This is the schedule of itemized deductions. If your itemized deductions do not exceed your standard deductions by the losses you in effect do not recoup them, since you would be entitled to whatever the standard deduction amount for your age and marital status would be.
Now, to reference the Mississippi state tax that is always deducted by the Mississippi casinos. Mississippi passed a tax law several years ago that makes
the amount withheld belong to Mississippi and those from other states cannot file an out of state Mississippi return to recoup those taxes. What you can do is to add the amount withheld to your schedule A (if you file one) together with any other state taxes withheld i.e. from a paycheck. The key to recouping your losses is filing that schedule A - itemized deductions with your federal tax return. Keep good records - the best way to do this is to get the players club cards from each casino and you can get a win/loss statement each year to support your losses. You can also use losing dog and horse track tickets, lottery tickets, etc. to support losses. Hope this helps.

 

[Darem1]

P.S. go to Canada

If you do decide to come here, welcome to the United States! But you may want to look into Canada if you can stand the cold. I lived in Canada for not quite a year until the cold weather chased me back to the States, but I found Canada to be nicer, cleaner, safer, the people nicer, etc. Much less nonsense on TV and in the politics. I don't want to seem un-American, I love my country, but I had a wonderful time up in Canada many years ago and I would go back any time they can figure out how to keep it temperate up there, lol. They also have universal health care up there that we may or may never get down here. But you gotta love snow.......and it starts in OCTOBER! At least in Ontario it did.

 

[4 of a kind]

If you had to pay extra taxes on gambling winnings after all the options available to avoid that, it may not be a bad problem.

I certainly wouldn't mind paying the taxes on the 333 million dollars won today by one person in the lottery.

In the past years whenever I had to pay extra taxes as a result of gambling, it always was a good year.

 

[AussieGambler21]

If you do decide to come here, welcome to the United States! But you may want to look into Canada if you can stand the cold. I lived in Canada for not quite a year until the cold weather chased me back to the States, but I found Canada to be nicer, cleaner, safer, the people nicer, etc. Much less nonsense on TV and in the politics. I don't want to seem un-American, I love my country, but I had a wonderful time up in Canada many years ago and I would go back any time they can figure out how to keep it temperate up there, lol. They also have universal health care up there that we may or may never get down here. But you gotta love snow.......and it starts in OCTOBER! At least in Ontario it did.

All country options are open for me right now as i would love to live and work in another country and part of that decision for me (a big part anyways) is the view on taxes and gambling and if they do have a tax on gambling how easy it is to do the paperwork and whether you get most of it back in the form of a tax refund.

The only thing that would keep me in Australia right now is my successful entry into the Australian Armed Forces. Although if i was able to somehow get into the US Army, it would be a no brainer and i would fly over tomorrow if i could.

I don't mind the cold at all and have never experienced a white christmas, let alone snow (except once when i was about 12) as i have always lived in a part of Australia which never snows (ever).

I would still consider Canada however i am not too sure about their views on gambling and taxes, how many casinos they have and more importantly how easy it is for Canadians to enter the US, not to mention what their laws are on internet gaming?

On another note thanks for all the info everyone has provided as it has been really helpful

 

[love2winalot]

Hiya: As far as Taxes go, it all comes down to one thing, "excluding professional poker players/sports betters", and that is, Do you play Slots, or Table Games?

A slot player player wins $1201 and has to file a w2g, and pay taxes on it.
A Table player walks away with $10,000, and has to do nothing at all.

So, besides being a holy roller, you ask, Why would you claim Wins at a Casino, if you did not have to? Simple, as proof of income. Want to buy a house? Show us your tax return for the last 2 years. No one cares where the money came from, just what your gross income from the year was.

 

[AussieGambler21]

Hiya: As far as Taxes go, it all comes down to one thing, "excluding professional poker players/sports betters", and that is, Do you play Slots, or Table Games?

A slot player player wins $1201 and has to file a w2g, and pay taxes on it.
A Table player walks away with $10,000, and has to do nothing at all.

So, besides being a holy roller, you ask, Why would you claim Wins at a Casino, if you did not have to? Simple, as proof of income. Want to buy a house? Show us your tax return for the last 2 years. No one cares where the money came from, just what your gross income from the year was.

Ok well i hate slots with a passion so that is out as i will only play table games at a casino, in particular poker, blackjack, Caribbean Stud and maybe some Roulette.

So are you saying that basically, i can live in America, only play Table games at the casinos and not have to declare anything at all (if i don't want to)? No forms, no tax with held, nothing?

 

[Jasminebed]

We don't tax gambling winnings, lotteries or money won on game shows. Losses are not deductible.

If you have landed immigrant status, you will still have an Australian passport and are able to visit the US. There is a limit to how long you can be out of country and re-admitted though. Not sure how long, maybe 90 days?

There are quite a number of both Government and Native run casinos in most provinces, and VLTs in bars in several provinces.

A lot depends on just where you settle.

 

[SlotKing]

So are you saying that basically, i can live in America, only play Table games at the casinos and not have to declare anything at all (if i don't want to)? No forms, no tax with held, nothing?

Actually, yes... because since Federal guidelines require taxes be withheld on any wager that is 300x your bet or more, winnings of $1,200+ (slots only) or winnings of $1,500+ (Keno), table games would be your best bet. Since table games do not offer the odds that slot machines/keno/other electronic games do, You could conceivably play table games the entire time, be up hundreds of thousands of dollars, and walk out without having to pay a single cent of federal or state tax.

The only exception to this rule is table game progressive jackpot side bets. Should you happen to win one of these where it is not a fixed-odds payout, you would be required to pay taxes on this. All other table game winnings are exempt from taxes.

 

[4 of a kind]

You could conceivably play table games the entire time, be up hundreds of thousands of dollars, and walk out without having to pay a single cent of federal or state tax.



Provided you cash out under 10k per cage visit.

 

[GrandMaster]

You could conceivably play table games the entire time, be up hundreds of thousands of dollars, and walk out without having to pay a single cent of federal or state tax.



Provided you cash out under 10k per cage visit.

You are required to pay taxes whether any paperwork is generated. Splitting transactions into smaller ones in order to avoid detection is in itself a crime (structuring, aka "smurfing") with potentially much greater punishments than mere tax evasion. Winning hundreds of thousands of dollars would generate plenty of interest from casino management, not to mention the fact that the casino itself can be punished if it fails to report a series of transactions whose sum exceeds $10,000 in one day.

 

[4 of a kind]

You are required to pay taxes whether any paperwork is generated. Splitting transactions into smaller ones in order to avoid detection is in itself a crime (structuring, aka "smurfing") with potentially much greater punishments than mere tax evasion. Winning hundreds of thousands of dollars would generate plenty of interest from casino management, not to mention the fact that the casino itself can be punished if it fails to report a series of transactions whose sum exceeds $10,000 in one day.

Yes this quote is absolutely a matter of fact and law. But in the real world especially here in the USA, tax evasion in every form is common practice. Have you been reading about our congressmen, senators, and appointed public servants lately over here. I don't even want to get started with big business. Three recent appointees this past year couldn't even take office has a result of past tax evasion. There must be at least 4 or 5 others we read about everyday here under investigation for the same. These investigations usually involve millions.

I also understand it is righteous and the liability of every citizen to do the right thing. But I can't recall reading one article, or seeing one newscast about one single casino ever reporting any player for tax evasion any where in the world.

Big hits on slot machines are obviously reported. Forget about big hits, you can't even get away with anything over $1200.00 dollars.

Making a huge hit at the tables over 50k usually involves a high roller. If he uses friends and family to cash out to avoid taxes, and even if the casino knows it, no such reporting will ever occur. They would surely be losing a good customer, with no chance of ever getting it back. Sorry, it's just not gonna happen.

Imagine reading an article or seeing a news report about a casino turning in a customer for tax evasion, and three of his buddies also being charged with facilitating tax evasion. They might as well close the doors.

 

[GrandMaster]

I also understand it is righteous and the liability of every citizen to do the right thing. But I can't recall reading one article, or seeing one newscast about one single casino ever reporting any player for tax evasion any where in the world.

Big hits on slot machines are obviously reported. Forget about big hits, you can't even get away with anything over $1200.00 dollars.

Making a huge hit at the tables over 50k usually involves a high roller. If he uses friends and family to cash out to avoid taxes, and even if the casino knows it, no such reporting will ever occur. They would surely be losing a good customer, with no chance of ever getting it back. Sorry, it's just not gonna happen.

Imagine reading an article or seeing a news report about a casino turning in a customer for tax evasion, and three of his buddies also being charged with facilitating tax evasion. They might as well close the doors.

You misunderstand. Casinos don't report tax evasion, they couldn't even if they wanted to since they cannot know players' future tax returns. They just file currency transaction reports (more than 100,000 a year) and suspicious activity reports (about 10,000 a year). In the casinos everybody is being watched by someone, there would have to be several casino employees involved, and you would need dozen of smurf. It is not as easy as you make it out to be.

One guy who was caught due to currency transaction reports:

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.
MGM Mirage was fined $5 million for failing to file reports between 2001 and 2003:

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. I bet they pay more attention now.

 

[4 of a kind]

I could carry on with debate GrandMaster, but really don't see any point. Interesting research, but not really on target.

 

[scratchy]

Good Day Fellows Gamblers

This is a good thread going on here. I live in Canada and boy I am sure glad I do when it comes to gambling. No taxes on gambling, lotto, or online. Someone mentioned about casino's, well I live in Oil Country, the province of Alberta and I think we have about 35 ish casino's in the province. The two major cities Edmonton and Calgary have about 7 a piece. We don't get heat up here from the casino's, at least I have not seen or heard about it. That in case I don't know what you would consider a high roller.

Anyways, it is about a 3 hour plane ride to vegas from Calgary or Edmonton. The only thing that is gonna kill you moving here is housing prices or rent, average house price is 350,000.

Scratchy

 

[winbig]

I wasn't really sure where to post this so please move to a more appropriate section of the forum if need be.I couldn't find a real suitable section to post this but would like peoples thoughts and ideas on the matter.

I am thinking of moving to the US but don't like the idea of paying tax on my gambling wins so i was just wondering how much tax the casinos actually take out of your gambling wins, if you can claim tax refunds on this and generally how much of an effort it takes to declare your winnings and losses to the IRS?

I would love to move to the US but the taxes on gambling is probably the only thing that is really stopping me from going any further with the idea however i don't mind paying taxes as long as they are reasonable.You also have to bear in mind i come from a country where all gambling wins and losses are completely tax exempt.

So please give me your opinions.

For casinos, you can win $9,999 in a year and still not get a W2G to use in filing your federal taxes. As far as state taxes go, it varies between states, but it seems the norm is that if you win $1200+ on one game/slot, you'll have to pay taxes on it.

Splitting up transactions between cages is a moot point when it comes to the $10K threshold. If you're playing with a players card, they can track your wins/losses down to the penny.

Here's an example of the win/loss record that the Harrah's group spits out each year. I did pretty good, but still didn't have to pay a penny of my winnings on taxes:

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Of course there is a loophole. Simply don't play with a player's card, and they will have no way of tracking your wins/losses. The downside to this would be that you'll never get any sort of comps, and if you ever hit it big, you'll have some serious explaining to do to the IRS.

If you're a low roller, I don't see casinos having a problem in playing without a card. However, I have seen some casinos with lower table limits if you're playing 'unrated' ie: without a players card.

edit: If you're a poker player, it's impossible for them to track your wins/losses, so it's up to you in regards to claiming anything on your taxes if you only play cash games as opposed to tournaments.

 

[GrandMaster]

You are mistaken on several points. $10,000 is the daily limit for cash transaction reports. The limits for W-2G vary from $600 to $5,000, but all gambling winnings are taxable at the federal level (losses may be claimed as itemized deductions) regardless of whether a W-2G was issued. There must be billions of dollars of unpaid taxes on gambling winnings, yet this does not seem to bother anyone in the government.

 

[winbig]

You are mistaken on several points. $10,000 is the daily limit for cash transaction reports. The limits for W-2G vary from $600 to $5,000, but all gambling winnings are taxable at the federal level (losses may be claimed as itemized deductions) regardless of whether a W-2G was issued. There must be billions of dollars of unpaid taxes on gambling winnings, yet this does not seem to bother anyone in the government.

I would think that if W2G's were required for overall wins of $600 - $5,000, then casinos would be obligated by law to send one out...

..and you're right about it not bothering anyone in the government..if the casinos don't send out a w2g, then of course nobody is going to claim anything on their taxes.

 

[GrandMaster]

I would think that if W2G's were required for overall wins of $600 - $5,000, then casinos would be obligated by law to send one out...

Straight from the horse's mouth:

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. Scroll down to page 5 for the instructions.