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rodltg2
02-18-2007, 10:20 PM
i went to lake tahoe this weekend and after a day on the slopes we went to the casinos. my buddy hit a jackpot on a slot machine for $4000. after they took out taxes they only gave him $2000 :confused:
it seems to me that something is not right. 50%???? they take that much? and when do they consider a winning large enough to tax.? and what about when you win on the tbales. dont get taxed on that right?

JKTX21
02-18-2007, 10:23 PM
That doesn't sound right, unless Nevada has some crazy state tax. When you file your income taxes, you are supposed to net your winnings and losses. If you are in the red, you cannot deduct gambling losses from your AGI. If you are on the winning side, this must be added as regular income.

Leroy
02-18-2007, 11:00 PM
Looks like around $1200. Pretty convenient huh, keep track of your winnings, your loses....well I don't see that they bring out a tax loss form.

Of course then you tax accountant can show winnings and taxes paid which are probably too much and get some back....


Google something like "tax rules on slot winnings"

JimN
02-18-2007, 11:06 PM
$600 is the cutoff for a 1099 form and I thought lottery or gambling winnings were taxed differently, but 50% is pretty steep. OTOH, it's two grand you didn't have before and the taxes are paid up.

If you don't want it, I'll take it off your hands.

Leroy
02-18-2007, 11:10 PM
What about the 3G in loss to make that 2G statistatically that most people realize? Do I get an IRS LOSS for that???? I don't think so.....

$600 is the cutoff for a 1099 form and I thought lottery or gambling winnings were taxed differently, but 50% is pretty steep. OTOH, it's two grand you didn't have before and the taxes are paid up.

If you don't want it, I'll take it off your hands.

JKTX21
02-18-2007, 11:11 PM
I digress... you can take gambling losses as a deduction, if you itemize. But only to the extent of your gambling income. So it still nets.

robisjo
02-18-2007, 11:12 PM
His gambling winnings will be reported to him on a W-2G. It will need to be reported on his income tax returns and any losses that he incurred can be used to offset his winnings. If he has $4,000 in losses (documenation will be required if he gets audited) then he netted nothing and will get the money back when he files his taxes. Every situation is unique and he should consult his tax adviser for his situation. If he does not have a good tax adviser (CPA), I can refer you one.

Farmer Ted
02-18-2007, 11:12 PM
Your pal got hosed, I believe the standard withholding rate is 28% on gambling winnings, now, if he chose not to to divulge his SSN and got stuck with the "flat rate" he should have gave up the digits.

Did he get a W-2G that shows he paid that much tax?



http://www.irs.gov/publications/p505/ch01.html#d0e4054

Gambling Winnings
Income tax is withheld at a flat rate from certain kinds of gambling winnings.

Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding.

Any sweepstakes, wagering pool, or lottery.

Any other wager if the proceeds are at least 300 times the amount of the bet.

It does not matter whether your winnings are paid in cash, in property, or as an annuity. Winnings not paid in cash are taken into account at their fair market value.

Exception. Gambling winnings from bingo, keno, and slot machines are generally not subject to income tax withholding. However, you may need to provide the payer with a social security number to avoid withholding. See Backup withholding on gambling winnings, later. If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. See chapter 2.

If you do not pay enough tax through withholding or estimated tax, you may be subject to a penalty. See chapter 4.

Form W-2G. If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld.

Report the tax withheld on Form 1040, line 64.

Information to give payer. If the payer asks, you must give the payer all the following information.
Your name, address, and social security number.

Whether you made identical wagers (explained later).

Whether someone else is entitled to any part of the winnings subject to withholding. If so, you must complete Form 5754, Statement by Person(s) Receiving Gambling Winnings, and return it to the payer. The payer will use it to prepare a Form W-2G for each of the winners.


Identical wagers. You may have to give the payer a statement of the amount of your winnings, if any, from identical wagers. If this statement is required, the payer will ask you for it. You provide this statement by signing Form W-2G or, if required, Form 5754.

Identical wagers include two bets placed in a pari-mutuel pool on one horse to win a particular race. However, the bets are not identical if one bet is “to win” and one bet is “to place.” In addition, they are not identical if the bets were placed in different pari-mutuel pools. For example, a bet in a pool conducted by the racetrack and a bet in a separate pool conducted by an offtrack betting establishment in which the bets are not pooled with those placed at the track are not identical wagers.

Backup withholding on gambling winnings. If you have any kind of gambling winnings and do not give the payer your social security number, the payer may have to withhold income tax at a flat rate. This rule applies to keno winnings of more than $1,500, bingo and slot machine winnings of more than $1,200, and certain other gambling winnings of more than $600.

Leroy
02-18-2007, 11:28 PM
I don't know why this isn't simply if you gamble your loses are loses and your winnings are taxed like income.


Make this a basic obligation of gambling.

I digress... you can take gambling losses as a deduction, if you itemize. But only to the extent of your gambling income. So it still nets.

Ric
02-19-2007, 09:58 AM
Looks like farmer nailed it. I would have assumed that winnings were taxed at max rate and then the difference would be refunded to you on your tax return, (were you to report them) Buuut, looks like you have the option to not give them your ss# when you cash out and they tax you lots. Rodl, I'd think the tables are taxed the same but I am no tax expert

Jim@BAWS
02-19-2007, 10:01 AM
Damn Nevada Mafia...there everywhere.

WakeSeeky
02-19-2007, 06:50 PM
Actually, slot winnings are subject to withholding when you win over $1200. No, it's not Nevada, it's Federal and you'd be doing the same thing if you hit a jackpot in Atlantic City or anywhere else. Your friend will receive a W-2G at some point, and it should all shake out when he files his taxes next year. I don't know about the amount of withholding, but %50 doesn't surprise me. The IRS does like to make sure they get their money.

All I know for sure is that if you hit $1200+ on a slot machine you'll be filling out forms. Beyond that, I don't know about when he'll get his paperwork or how much really should be withheld. I don't gamble. :D

André
02-19-2007, 07:14 PM
Neither Casino or lottery winnings are taxables here.
But they take their money elsewhere beleive me!:rolleyes:

WakeSeeky
02-19-2007, 07:21 PM
Neither Casino or lottery winnings are taxables here.
But they take their money elsewhere beleive me!:rolleyes:

Yes they do, I also work with gaming software for Canada. ;)