California Casino Jackpot Tax

The California Lottery will mail you an IRS Form W-2G, Certain Gambling Winnings, by Jan. 31, the year after you won the lottery. This form shows the amount of your winnings like a W-2 shows the amount of your earnings. Also like a W-2, you submit the W-2G to the IRS with your tax return. You should also keep a copy for your records. While California is a relatively high tax state, there’s an exception for CA Lottery winners. Tip You can typically expect to pay the highest federal tax rate of 37 percent on your lottery.

You seem to know a lot about on-line casinos. I’m curious if the winnings are taxable income. I have tried the IRS site and they do not specifically mention off-shore or on-line gambling.

Yes, they are taxable. You are on the honor system to report the income. The casinos will not report any winnings to the IRS. It isn’t just on-line casinos, ANY net gambling winnings are taxable, regardless of where or how they were won.

Hey dude I had a random question and I didn’t know who else to ask!! I won 12000 on an online casino. Should I cash it all out at once? Do I have to do anything related to reporting it on my taxes? If I don’t report it will I get in trouble? What would you do in this situation? Thanks for the help!!!

Whether to cash out it all out at once is your decision. Assuming you are a U.S. citizen you are obligated to declare the income on your next tax return. If you don’t you could be charged with tax evasion. However this sort of thing is largely on the honor system. You are also allowed to deduct any gambling losses in the same year against your winnings.

I know that you are allowed to deduct gambling losses up to a certain amount on your tax returns...what is that limit?

Zero. You can not deduct a net loss at all. However if you have some W2G forms (generally given on wins of $1200 or more in slots, video poker, and keno) then you can deduct other losses against these wins. You should keep documentation for any losses you claim. You may be thinking of deducting losses on stocks. There you can deduct up to $3000 a year, and can carry over amounts larger than that to the next year. I’m still carrying over losses from the tech crash in 2000.

Hello! I was recently playing 50-way 20-cent video poker in Detroit, and was lucky enough to hit 2 four of a kinds on the deal- both hands were two deuces and a pair- and resulted in a jackpot and W-G. Not that I was complaining, but it occurred to me that because both pay outs were only slightly over the $1200 limit, that I could have avoided the jackpot tax if I were to play a few less hands. So my question is this: what is the maximum number of hands I should have played to minimize getting hit with the tax burden when getting dealt four of a kind on the deal? Keep up the great work with the site!

W2G forms are definitely something to think about when playing video poker at the larger bet amounts. Although you are obligated to pay taxes on your net win at the end of the year regardless of how many W2G forms you have, a payout of $1200 or more will necessitate a wait and obligate you to tip the person paying you. In less classy casinos a hand pay will also cause the tip vultures to start hovering around you. To avoid all of this sometimes the player should consider deviating from optimal strategy. For example with AAA88 in 10/7 double bonus the odds marginally favor keeping the aces only. However in a $2 to $10 game hitting four aces will pay over $1200, necessitating a W2G form, while a full house will stay under the limit. Considering the tax implications keeping the full house is the better play.

To answer your question I’ll assume a four of a kind pays 25 times the bet. Then a four of kind on the deal in a $0.20 50-play game will pay $0.20 * 5 * 50 * 25 = $1250. You will get a four of a kind on the deal once every 4165 hands, on average. If you were to drop the number of hands to 47 the win for a four of a kind on the deal would be 47 * $0.20 * 5 * 25 = $1175, staying under the W2G threshold.

By what method do casinos pay you when you cash out? For example, if you were to win say $10,000-$15,000 playing Roulette or Black Jack can you get that money in a cashiers check, money order, etc.? As one certainly doesn’t want to be walking around with or driving back to Canada with a bunch of cash on them!

I believe the policy at most casinos is that for large transactions you can have the funds any way you want. Before you consider laundering money by turning cash into checks be aware that casinos ask for a Social Security number and make a record of any transaction involving $10,000 or more.

On TV they had a program the Do & Don’ts in Las Vegas. On this program they advised you that when playing Blackjack and win you are not subject to taxes?? I can’t believe this.

You are subject to tax for any gambling winnings. However table games players are basically on the honor system. An exception that a W2G form is generated if a win is 300 for 1 or more odds and is over $600. That is usually only an issue with progressive jackpots. Also, if there is a cash transaction of $10,000 or over the casino is obligated to fill out a CTR, which stands for Cash Transaction Report. Yet these are nothing to worry about, and I think many big bettors are overly paranoid about them.

Quick question about withholding tax. As a Canadian I know the casino will withhold 30% on any slot winnings over $1200. My question...on the ticket out system in most Vegas hotels would the tax be charged on any ticket cashed out over $1200? Even if it wasn’t won on one specific jackpot and had accumulated over time? Will any $1200 always be a hand pay jackpot? and how do casinos handle players on high denomintaion machines? ie. three of a kind on a $500 machine would require a tax form.

Only single wins of $1,200 or over are subject to withholding. If you won over $1,200 in small wins you would not be subject. When you press the cash out button the machine doesn’t know your citizenship and will just print a voucher for whatever you had. Any $1,200 or over win will always lock up the machine until an employee unlocks it. On high denomination games, usually starting at $10 or $25, the casino may keep a log of all your taxable wins. On a $500 machine, I’m sure they would have somebody standing right next to the machine do the paperwork. When you are done they will give you a single W2G form for the sum, and in your case subtract the withholding from that.

How does the taxation (Form W2-G) work on machines whose coin-in values are near or greater than the $1200 threshold? Hypothetically, if a player bet $5000 on a Red, White, & Blue slot machine, and got three blanks, which returns the original bet, would the player get a W2-G?

California Casino Jackpot Taxi

The W2-G is based on the gross win, not the net win. So, yes, if the player got a $5000 push on a Red, White, & Blue, he would get a W2-G.

Cliff from Aiea

In the U.S., any gambling winnings of any kind and any amount are taxable. However, with table games, it is on the honor system to report.

Recently I visited Charles Town Races and Slots, betting on the Kentucky derby. A Hispanic guy had hit a good payout on a slot machine for $6,000 and seemed to be having some sort of ID problem. I was in the casino for about an hour. In passing him on the way out, still standing by the machine, he still seemed to be having a problem. My question is if he has no ID (for whatever reason) can he still get the payout? The casino is in the state of WV. Would the rules prohibit a person in the country illegally from betting or wining if he or she has bet?

I forwarded this one to Brian, who is a former gaming regulator, and currently a casino manager. Here is what he said,

The casino would not know that someone was in the country illegally. If he had a valid passport, the jackpot would be honored. The illegal may not know this, be scared or they may not have a valid ID to show. Whenever someone wins $1,200 or more, ID is required for tax purposes. If someone doesn’t have his ID, the jackpot would be held in the cage waiting for them to claim it. In most cases, the person has legitimately forgotten their ID; however, sometimes you run into a problem, such as a minor who was gaming. If he doesn’t claim it, the money has to be added back into revenue because the deduction (jackpot) was never paid or there are abandoned property rules that prevail. Also, like the U.S., most countries tax worldwide income. To that end, the U.S. has tax treaties with several countries to withhold or notify the respective governments of monies won in the U.S. so Uncle Sam always gets his cut.

Hi, I Recently won a large slots jackpot in Vegas. Had around $38k deducted for taxes. I’m a New Zealand citizen & tax resident. New Zealand has no gambling tax. The United States and New Zealand do have a joint tax agreement but I still had money deducted. I do believe I can get all or some back. I'm getting conflicting advice from tax people here. Can you recommend a good US tax accountant, or offer any advice? Enjoyed your site (esp. tipping re dealers & hosts)

This is getting out of my area, but I'll try to help. The IRS web site says that for this purpose, the U.S. has tax treaties with the following countries: Austria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russian Federation, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom. Note that New Zealand is not on the list.

If you are a resident of one of the listed countries, and you hit a jackpot of $1,200 or more, then you should ask to fill out a form W8BEN. That should reduce, or in most cases, eliminate the withholding.

Even if you are not from one of the listed countries, or don’t fill out the form, you can still get the withholding back by filling out form 1040NR, or the simplified version the 1040NR-EZ.

My own tax accountant is Marissa Chien EA, author of Tax Help for Gamblers. She does an outstanding job, but some might consider her expensive. For a 1040NR she says she charges about $1,000. She adds this form is usually incorrectly filled out by most others. Her e-mail is .

IRS PDF’s:

1040NR-EZ instructions (PDF)
1040NR-EZ form (PDF)
1040NR instructions (PDF)
1040NR form (PDF)
W8BEN instructions (PDF)
W8BEN form (PDF)

Marissa is on Twitter at @taxpro4gamblers, where she occasionally answers tax questions to followers.

Las Vegas casinos, namely Caesars and Bellagio, have recently been giving me a harder time when cashing out over a few thousand dollars in chips. This past trip when I cashed out $8,000 at Caesers they asked for my Social Security number. When I naturally asked why, they said they couldn’t tell me exactly and all they could do was give me a card mentioning something vague about Title 31. Could you explain to me and your audience in greater detail what exactly is title 31 and, specifically, what will and will not get your flagged by the IRS. Thanks!

Title 31 is a regulation stating that the casino should make a record of cash transactions of over $10,000 by a single player in a single day. In such cases, a CTR must be filled out, which stands for Cash Transaction Report. This includes making multiple transactions, adding up to over $10,000. If you cash chips close to, but under, $10,000, the cage will likely want to make a note of it, in case you come back later that day, and go over the $10,000 daily limit.

My advice is to give them what they ask for. You have a lot more to fear by looking like you are avoiding CTRs than the CTRs themselves. In fact, I think there is nothing to fear from a legitimate CTR; the casinos generate lots of them. Personally, I have generated hundreds, to no known detriment. However, it raises lots of attention when you look like you are going out of your way to avoid them. I know one person who was rebuffed when he tried to cash in chips, because he had too many previous redemptions of just under $10,000. So, that is my two cents. Better suited to answer this is 'Brian,' a current Las Vegas casino manager, and former regulator, whom I like to turn to for procedural questions like this.

In a nutshell, Title 31 is the U.S. Department of Treasury Code designed to prevent money laundering. It requires that certain large cash transactions be reported to the Government. These are filed on FinCEN Form 103 “Currency Transaction Reports by Casinos” (FinCEN is the Financial Crimes Enforcement Network). Casinos are required to report all currency transactions in excess of $10K in a single day. The “day” doesn't follow the clock − a casino picks their day (e.g., 3 a.m. to 2:59 a.m.).

All Financial Institutions comply with Title 31. Casinos are considered financial institutions because of the types of transactions they perform, which are similar to those of a bank (e.g., check cashing, wires, loans, cash exchanges). Unlike traditional financial institutions, casinos conduct a great deal of transactions with unknown patrons. When you set up your checking account at the bank, you give them all of the necessary information needed to fill out CTRs. However, when cashing chips at the cage, the only way the casino can get this information is to ask. Casinos have to get all of the necessary information to fill out a CTR before the patron crosses the $10,000 threshold. Since the fines for non-compliance are hefty, they make a diligent effort to comply.

Casinos are apprehensive to give patrons too much information on Title 31 for fear of inadvertently breaking the law. Casinos are specifically precluded from aiding patrons in structuring transactions in such a manner as to allow them to skirt the requirements. When you ask questions, they prefer to point to a preprinted informational card and don’t like to discuss the matter for fear of divulging inappropriate information.

Circumventing Title 31 is relatively easy for undocumented transactions (e.g., chip buys, chip redemptions, etc.), but why would you want to? If the casino has reason to believe that you are purposefully conducting your transactions in an effort to avoid the reporting requirements of Title 31, they'll fill out a Suspicious Activity Report by Casinos form (aka SARC). If a casino learns that you exceeded the $10K threshold and they didn't get the required information, they will bar you from gaming until they get it. — Brian

I have heard that to finance the health care bill, a surcharge will be imposed on GROSS income above a certain point. This will have a big impact on high-level slot players, who accumulate hundreds of W2-G forms, like me. Do you have any insight?

Here is what the bill says:

In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000. -- Section 59C(a) page 337 H.R. 3962 (PDF — 3270 KB) or CNN.com

The surcharge would be applied before the gambler could deduct any offsetting losses. I verified this with Marissa Chien, co-author of Tax Help for Gamblers. For high-level slot players, it is not difficult to rack up W2-G forms in the millions per year. Most of these players will still have a net loss on an annual basis. Past the million point in gross income, the player will pay a 5.4% tax on any win of $1,200 or more, even if there is a net loss for the year. This is just my opinion, but I think that isn’t fair. If we must tax gambling winnings (which they don’t in Canada), it should be on the net, not the gross winnings, on an annual basis. Should this become law, it will ruin high-level slot play in this country.
Marissa is on Twitter at @taxpro4gamblers, where she occasionally answers tax questions to followers.

I have a resolution this year to try and keep as accurate a track as I can on my gambling trips. Obviously, bankroll taken and net outcome are key entries. Since I play almost 100% craps, I don’t have to worry about tracking lots of games. This log needs to have enough information so I can use it to prove losses to offset the big jackpot my wife is going to win this year.

According to page 12 of IRS publication 529 (PDF), the minimum a gambling log should include is:

Date and type of wager or wagering activity.
The name and address or location of the gambling establishment.
Names of other persons present during the gambling activity.
Amount won or lost.

In addition, you should keep other documentation, such as W2-G forms and losing tickets. Personally, I keep my log in Excel and always retain W2-G forms and losing sports tickets. The book Tax Help for Gamblers by Jean Scott & Marissa Chien has a whole chapter on this topic.

This question was raised and discussed in the forum of my companion site Wizard of Vegas.
Marissa is on Twitter at @taxpro4gamblers, where she occasionally answers tax questions to followers.

In your Nov 6, 2009 column you warned that to help finance the health care bill any gambling winnings from W2G forms over $1,000,000 would be subject to a 5.4% tax, and this would be applied before the deduction of gambling losses. This could have a big impact on very high-end slot players, who rack up stacks of W2G forms. My question is, what is the status of that?

I’m told that said provision (section 59C) was dropped from the final bill. That is the good news. The bad news is there is a new Medicare tax on unearned income above $250,000 for a married couple, starting in 2013. It looks like this may apply to gambling winnings before itemizing any gambling losses. Please ask me about this again in about two years for a status report.

This question was raised and discussed in the forum of my companion site Wizard of Vegas.

gambler

That is quite the difficult and controversial question. Before I answer, let me say that tax law is not my area of expertise, so you should consult a tax professional about your personal situation. Another better source than me about this is Tax Help for Gamblers by Jean Scott & Marissa Chien. Chapter three deals with this topic.

The general rule of thumb is that earnings are taxable and gifts are not. So a no-obligation comp would not be taxable. Anything that was given to you based on points, a drawing, a tournament, or earned some other way would be taxable. Granted this is not going to cover every situation, and some situations can be in a gray area. If you’re in doubt, consult a tax professional.

This question was raised and discussed in the forum of my companion site Wizard of Vegas.

I didn't realize this until I started hitting W2-Gs from casinos, but are there any ways to get paid without giving a Social Security number? I'm a bit paranoid about casinos getting more information than necessary. I hit a few royals and hand pays and do not like that the casino holds on to my license and I have to write in my social.

First, you'll have to produce photo identification, or the casino will hold onto the money until you do. If you show identification but decline to produce or declare a valid social security or other tax identification number, then 25% to 30% will be withheld depending on whether the jackpot is more or less than $5,000, and whether you are from the United States or a foreign country with a reciprocal tax treaty.
As of 2011, such countries were Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bulgaria, Canada, China, Cyprus, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Mexico, Moldova, Morocco, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russia, Russia, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, The Czech Republic, The Netherlands, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan and Venezuela.
I've been trying to figure out the rules exactly, but it is giving me a headache. Please refer to IRS rules for issuing a W2G form for more information.
My thanks to Marissa Chien, co-author of Tax Help for Gamblers , and MathExtremist for their help with this question.
This question is discussed in my forum at Wizard of Vegas.

Jan 30 '18 at 17:09

Tax Advice for Casino Players: W2-G Handpay Jackpots, Filing as a 'Pro' and More

The feeling of stress and anxiety that comes when filing taxes can be overwhelming for anyone, but especially for casino players that hit slot jackpots or enjoy other high stakes gaming.

Everyone has a different opinion about how to file, and there are very few resources available that give gamblers peace of mind. That’s why I recently sat down with Ray Kondler of Kondler & Associates. Ray is a Certified Public Accountant based in Atlantic City and Las Vegas.

He’s also one of the top national experts on gambling taxes.

While Ray works closely with the World Series of Poker, he also serves slot and table players in all 50 states. In our fascinating conversation, Ray gave us the insider’s look at gambling taxes, keys for minimizing the chances of an audit, and tips for paying as little as possible… while staying within the bounds of the law, of course!

Here are the highlights from our great conversation. (You can also watch or listen to the full episode below.)

The First Thing Gamblers Should Know About Taxes

One of the most common questions new gamblers ask is, “When do I have to report my winnings?” The answer actually varies depending on what you play.

Casinos will issue W-2Gs for winnings greater than $1,200 from a slot machine or $5,000 from poker. The moment you hit the jackpot, a casino staff member will bring the W-2G to you at the machine to get a signature (although new technology is emerging in high limit slot areas that lets players electronically sign the W-2G so they can get back to playing right away). The casino sends a copy of all W-2Gs to the IRS.

(Table game players don't face the same level of scrutiny. Casinos don't issue W-2Gs for table games like craps and blackjack.)

Did you know that the IRS matches up the W-2Gs the casino sends with your tax return?

This is extremely important! If you fail to file those winnings on your tax return, in most cases, the IRS will send a notice asking you to amend your return.

Want to protect yourself from an audit? Download our FREE Casino Player's Logbook to start keeping better records of your gambling activity.

As Ray points out, this practice isn’t limited to land-based casinos. Cruise lines also issue W-2Gs, and US Citizens are required to pay tax on gambling income earned worldwide — not just in the US.

The bottom line is, if you receive a W-2G, don’t ignore it. The IRS sure won't...

Once gamblers know which winnings to report, the next question is usually, “How do I minimize my tax bill?”

Filing as a Professional Gambler

When Ray sits down with a client, one of the first decisions they make is whether the player should register as a professional gambler.

Most slot players wouldn't even think of filing as a professional. (To be honest, I didn't even know that was an option before speaking with Ray). For slot players, especially retirees or those with limited other income, filing as a professional gambler comes with a unique set of advantages.

In most states, a normal casino player (aka amateur gambler) can only write off casino losses up to their total winnings. So, for example, if you have $100,000 in W-2G winnings, but lost $150,000 during the year, you can only write off $100,000 of losses when filing taes.

***Note: some states (Connecticut, Illinois, Indiana, Massachusetts, Michigan, West Virginia, and Wisconsin) do not allow amateur gamblers to deduct gambling losses from their winnings. The only way around this is to file as a professional and deduct losses as an “expense of doing business” on a Schedule C.

On the other hand, a professional gambler can deduct other expenses associated with their casino play (it's a JOB after all - ha!). If they have $100,000 in W-2Gs, they can write off $100,000 in losses AND subscriptions to gambling resources, travel and meal expenses, home office expenses, and legal/professional fees. Professionals can then actually show a net loss on their Schedule C (Self-Employment) tax return and deduct it against their other income (like taxable Social Security income).

So who can qualify as a professional?

It turns out, qualifying as a pro isn’t based on winnings. It’s actually based on how much time someone spends gambling. Someone who plays slots five or six hours per day and has no other job could most likely file as a professional. This is especially useful for gambling retirees!

When advising retired clients, Ray recommends filing as a professional as soon as their Social Security income is taxable (over $40,000). This allows any below-the-line gambling losses to reduce taxable income.

Filing as a professional makes sense for many casino players, but there also are a few downsides to be aware of.

First, filing as a professional increases your chances of being audited.

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Another downside is if you file as a professional and win a significant amount, you’ll have to pay Social Security tax.

Depending on the amount of Social Security tax, it may be smarter to file as an amateur. This is something Ray and his team help their clients figure out. They’ll complete the tax returns both as a professional and as an amateur. Then they will see which filing status makes the most sense for the client for that particular year.

It’s also worth noting that filing as either a professional or amateur one year doesn’t lock you in to that status for following years. For example, let’s say you filed 2016 tax return as an amateur gambler. In 2017, you gambled the same amount of time, but due to an increase in winnings, it makes more sense to file as a professional. This is allowed by the IRS. You can decide which filing status is right for you on a year to year basis.

How to Protect Yourself From a Tax Audit

While casual and moderate gamblers have a relatively low chance of being audited, the prospect of being audited is stressful for anyone. Ray says the most important thing you can do to protect yourself is to keep good records.

It might be a pain in the neck, but everyone should keep clear, detailed records — especially if you’re filing as a professional.

Ray recommends using a dedicated credit/debit card to charge all gambling-related expenses. Then keep track of all gambling activity with a logbook.

Want to protect yourself from an audit? Download our FREE Casino Player's Logbook to start keeping better records of your gambling activity.

Most of Ray’s clients log their activity in a spreadsheet at the end of the week, but he has many clients that keep daily records. While there are several logging apps available to gamblers, they tend to be clunky or difficult to use. Some clients use old-fashioned pencil and paper, but Ray recommends keeping a spreadsheet.

The team at Kondler & Associates have even created several logbook spreadsheet templates they send to their clients to simplify the process.

Some gamblers think of keeping logbooks as an unnecessary step. Instead, they simply rely on the win-loss statements casinos send out to their loyalty club members. This can be effective, but any gambling done at other casinos (where they don’t have a loyalty card), isn’t reflected in those statements.

By keeping a logbook, you can ensure your losses at any casino (even those where you aren’t a loyalty member) are accounted for in your taxes. This lowers your tax bill and protects you

Ray also points out that even if you failed to keep a good logbook in the past, you can go back and recreate it. In the event of an audit, the IRS can request ATM receipts to prove your records are accurate. But if you claim to have gambled with cash from a safe deposit box, no one can prove otherwise.

Another thing to consider for slot players is how to handle the tax liability from a 'group pull'jackpot (for those that don't know, this is where a group pools money and hits the high limit slots in search of JACKPOTS). Let's say you and four other players decide to throw equal money into a pot and hit the high-limit slot rooms. If the group hits the jackpot, only ONE person will sign the W-2G, meaning that person accepts all of the tax liability (even though they only took 20% of the winnings!).

The way to avoid getting stuck footing the entire tax bill is to document the payouts with 1099s. If you win a big jackpot in a group pull, make sure to gather the other players’ full names, addresses, and Social Security numbers before handing out the money. Then issue a 1099 to each player for their share of the winnings.

If you do the extra step of issuing 1099s to the people in the winning group pull, then when you file your taxes, you can feel comfortable only claiming your 20% take of the jackpot on your tax return because you'll have a nice paper trail to show the IRS if they come sniffing around.

Comps and the IRS

When casinos issue comps, gamblers can potentially receive incentives worth thousands upon thousands of dollars. So, how does the IRS tax these comps?

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The short answer is they don’t tax comps.

In over 30 years of working as a CPA, Ray has never seen a 1099 issued for comps. This would be a record-keeping nightmare for casinos if they had to document every meal or lodging comp for tax purposes.

He has seen 1099s issued for prizes though. For example, if there’s a drawing and you win $2000, you’ll receive a 1099 for “other income”. This is also true for prize winnings like free cars or other expensive merchandise. While it’s different from a W-2G, it’s still required to report on your taxes, but these are extraordinary circumstances.

Regarding normal comps, there’s no need to report them as income.

Professional Help for Gambling Taxes

Whether you’re a slot player, table gamer, or poker player, there’s a good chance you’d rather spend your time playing than worrying about taxes.

There are a lot of extremely talented CPAs all around the country, but many don't have a clue how to minimize tax winnings because they rarely see it. Ray's team works on minimizing tax exposure from gambling winnings all day every day

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So, if you have any questions about gambling taxes, feel free to reach out to Kondler & Associates HERE. They never charge for calls or emails, and they’re extremely quick to reply. They’re an incredibly valuable resource, so don’t hesitate to reach out. For more on Ray and his firm Kondler & Associates, visit KondlerCPA.com.

Want to protect yourself from an audit? Download our FREE Casino Player's Logbook to start keeping better records of your gambling activity.

California Casino Jackpot Tax Bracket

2 Comments

FEB 3 '18

I'd like to add a little color to this article by pointing out a few changes that will go into effect for the 2018 tax year as a result of the new tax bill. Professional gamblers used to be able to deduct expenses as well as offset winnings with losses. The new way, their deduction is capped at the amount of winnings. More significantly, for mid-rollers like myself (I do $4,000 - $5,000 a day coin on slots over about 28 days a year in Vegas; some years I have no handpays and some years I have a few) - while it is true that winnings can still be offset with losses if you itemize, because of the increase in the standard deduction as well as the elimination of the personal exemption(s) and capping of property/state tax deduction at $10,000, the threshold for itemizing has basically been doubled. Whereas in the past, I have always been able to totally offset W-2G winnings with losses, with the new law and my current level of still allowed itemizable deductions (mortgage interest and property/state income tax) I would now have to have at least $12,000 in W-2Gs to be able to itemize, and even then, I would still end up paying Fed taxes on that first $12,000. Finally, with respect to group pulls - I've organized several and I have always been lucky to have a UK resident participating who is not subject to taxes OR withholding. Under the new tax law, I will not do one unless that condition is present. I'm not saying you shouldn't do one, they're a lot of fun, but if you do, make sure you consider the tax implications and discuss how you are going to handle a handpay with the participants ahead of the event. Hitting a big win and then determining that 12% or 22% or more is going to have to come off the top is not going to be a welcome surprise to the group.

California Casino Jackpot Tax Refund

FEB 6 '18