Читать книгу Casino Gambling For Dummies - Swain Scheps - Страница 118

First problem: Classifying taxes on gambling winnings is a complex subject. Another problem: The tax code often changes from year to year. So, if you’re a regular gambler, consulting with your CPA or accountant each year is critical. I’m not a tax advisor (and don’t play one on TV).

One general principle is pretty much etched in stone: The IRS views gambling winnings as income. If you win at the casino, get a prize in a sweepstakes, or a bet on a horse race, it doesn’t matter. The amount you won minus the amount of your wager is considered income. And income means income taxes. So, don’t assume that your gambling income is somehow tax-free. In fact, gambling income is taxed like any other source of ordinary income.

Under certain conditions, the casino will do you the favor of paying some of your income tax in advance, regardless of whether you like it. If you win a poker tournament and the prize is $5,000 more than the entry fee, $1,200 at a slot machine, or $1,500 at keno, the casino will report it to the IRS using a form W-2G (guess what the G stands for…). Additionally, if you win a progressive bet of at least $600 where the winning amount was 300 times greater than the bet (for example, a 1,000 to 1 payoff from a royal flush on the six-card bonus bet on a three-card poker hand), the casino gives you 76% of your prize and sends 24% to the IRS.

Does that mean you pay 24% tax on that win? No. Like the tax withholding on your paycheck, 24% is the share of winnings that gets withheld or sent to the IRS as a down payment on your annual income tax. If you have ever had a job that paid out a bonus, you’ll be familiar with automatic withholding requirements. What you actually owe is something you calculate at tax time.

So if you do your tax return and find your marginal tax rate is lower than 24%, the IRS will return some of those dollars back to you that the casino sent them earlier in the year. It’s also possible you’ve made so much money that your marginal tax rate is higher than 24%. That’s after exemptions, deductions, write-offs, and other accounting techniques to lower your taxes. If your marginal tax rate is more than 24%, Te Salute, Don Corleone. Just keep in mind that, unlike your paycheck, where you choose (roughly) how much is withheld, the casino has no choice in the matter. They are legally obligated to send 24% to the IRS. The government will kindly hold on to your dough until you prove you deserve some of it back next April.

If it’s not clear to you by now, this book is not your go-to source for every possible scenario of how your gambling affects your tax return. Just know that losses are not as straightforward as winnings. Did you win money gambling? It’s subject to income tax. Did you have some losses, too? You can deduct those from your winnings if you itemize your deductions. The bad news is, if you’re taking the standard deduction, you can’t subtract losses from winnings. And to add insult to injury, if you had a losing year, the amount of losses you can deduct can’t exceed the amount you won.

For example, say you had winnings of $4,300 for the year and losses of $5,000. You may assume that the higher losses cancel out the win, so you don’t owe any tax. But when your total deductions (including your gambling losses of $5,000) are less than the standard deduction (for a married couple filing jointly, that’s $25,100), you can’t take any of those losses on your return because you aren’t itemizing. Unfortunately, you still must pay taxes on your winnings, even though you actually lost. Confused? Welcome to the crazy world of the tax code.