Sometimes we get simple questions – we like them as much as the more complex ones. Let’s tackle one of those simple ones today:
How are taxes paid on fast pay?
Debby D.
For those not familiar, Fast Pay, or Self Pay, is available in certain casinos where jackpots between $1,200 and $10,000 can be claimed at the machine without any additional paperwork, instead of waiting for a slot attendant to bring back the money and pay it out in cash.
The casino effectively rolls up all the jackpots into a single total for the day – a player opts in with the cashier at the start of the day, and checks in again at the end to get the paper covering all the jackpots won. Instead of having a single piece of paper for every jackpot, they get one for the day.
It tends to be a simpler process for both sides, and for higher betting players who break that $1,200 threshold a lot, it means they can get back to playing a lot faster.
Effectively, taxes on fast pay wins are identical to a player confirming they’d like no taxes taken out of their jackpot. The amount of the win gets reported to the IRS just like any other jackpot, and the player who won the jackpot deals with them when they get to tax time.
The IRS allows that casino winnings can be offset by losses in certain situations, and players who are betting enough to qualify for fast pay tend to be among them, because on of it is having enough individual deductions to exceed the standard deduction that most of us end up using.
So when you already know you’re going to be able to write off your losses, it tends to be an easier decision to opt out of having taxes taken out, as it’s unlikely taxes will ultimately be owed. That said, some players could have a winning year here and there, so keeping track of where you are and what may be needed is always recommended.
And as always, we’re not accountants, so this should not be construed as tax advice, but rather information. We always recommend players consulting with an accountant versed in the gambling tax rules to ensure you’re making the right decisions based on your own financial situation.
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