It’s that time of year where many people (myself included) begin thinking about taxes. So instead of tackling one question, let’s tackle a few of yours:
I’m thinking you don’t do your own taxes. All the hand pays, federal and all the different states. That seems so crazy… Almost like a professional athlete.
Gary W.
You’re thinking correctly! Haha
My travel doesn’t slow down during tax season, and the paperwork involved is pretty substantial, so I do have an accountant who helps me through my taxes each year.
I have literally millions of dollars just in jackpots over the course of a year, so it just makes sense to have someone who can give it a close review and dedicate time to it vs. my attempting to do so around my other work. Sometimes it’s the right move to bring in the professionals!
Will the new tax laws change how you play?
Barry B.
No, I don’t have any plans on making changes to how I play. The change in jackpot handpay thresholds will reduce the amount of paperwork I receive, but all my wins and losses are recorded (quite literally, it’s on video) and reported each year.
The change in deductions to only allow 90% of losses against wins could have a minor impact, but like most gamblers I don’t win in an average year, so there’s more losses than wins, which will take the edge off that problem.
There’s also still attempts to revert the rule back to 100% of losses – I don’t know if they’ll be successful as they have lost that fight multiple times thus far, but there’s still time for change. (If you think it should change back, you can ask your local congressperson to support those proposals when they come up for a vote.)
So you put 4 grand in, and you win it back, do you have to pay taxes now even though you won your money back?
Trina L.
In my case, Trina, wins are declared as income, but if you itemize deductions on your federal taxes (which I do), losses up to a certain point can be offset against winnings. So that takes the edge off the problem you’re noting.
So it comes to federal taxes, I do not ask the casino to hold any out of my jackpots, because of my answer to Barry – my losses almost always exceed my wins, and as such I have a lot of losses to offset my winnings. Some states require tax withholding, and the casinos do that automatically in those cases.
The average player may owe taxes – it depends on your situation, and as such it’s worth asking an accountant who understands the various gambling rules if you’re hoping to clarify anything around your own taxes.
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My tax person just told me that this year things have to be entered by “session” and that possibly only the sessions w/ wins can claim the losses… there are way more losing sessions the winning ones.. I’m freaking out a bit… can’t we claim all losses up to a point against winnings?
The IRS on their website offers high-level guidance on what sorts of things need to be done to claim losses against the winnings. If you’re thinking they may be incorrect on this, it may not hurt to get a second opinion. From our side this is the first we’ve heard of this, but as we are not accountants we’re unable to give specific advice. We’re posting this comment in part to share your experience in case others encounter something similar (or conversely something different).