Paying Tax at American Casinos

[alternative_inv]

Some good info in the above responses, but in some cases it may only be partially correct.

I know that Oz doesn't typically come after or track gambling winnings but I thought they told the guy who won the World Series (Joe Hashem?) that he got a pass for his first win because he was not a "professional" at the time, but would have to pay in the future if he was considered to be a professional gambler.

As others have pointed out, the US has federal income tax with some states also having a state income tax. Although you are suppose to self-report, I don't know of anywhere that reports or withholds on table game winnings, but slot jackpots ($1200) and other large wins (keno, horses, etc.) are a different story. These are reported to the IRS on a W2-G (or 1099 in some cases). If you don't have a SSN or TIN, then you will typically have ~30% withheld. Some countries have a tax treaty with the US that may allow you to recoup this withholding even if you don't have losses to subtract against the wins. Not sure if Australia has this sort of tax treaty, but I know that France does.

How you are taxed federally depends on whether you are a professional or recreational gambler.

Gambling winnings of US residents/citizens are subject to federal income tax, but recreational gamblers do not have to pay social security/medicare taxes on winnings. However, they can only deduct gambling losses to the extent of their winnings as an itemized deduction on form 1040 schedule A. Gambling related expenses are not deductible. The disadvantage to showing gambling winnings as part of your taxable income and taking losses as an itemized deduction is that you may lose out on your standard deduction (fi you were not already itemizing) and it may bump up your adjusted gross income (AGI) that leads to phase outs of certain deductions.

Professional Gamblers show winnings on a schedule C and can deduct all losses and expenses as part of the schedule C. The disadvantage to filing as a professional gambler is that you have to pay social security & medicare taxes on your net schedule C figure. This is on top of federal income taxes and is about 15.2% on the first ~90 K and then about 2.9% (medicare only) thereafter. In theory, the social security taxes paid help bump up the payment you would receive when you retire, but this is another subject.

[alternative_inv]

A couple of other things...the record keeping required by the IRS is really no more detailed than a serious player should be doing anyways. However, in 15 years as a professional gambler (both personal and manager of a large team), I have had to deal with numerous IRS notices as well as 1 personal and 2 company audits that were directly related our gambling activities. None of these resulted in additional taxes owed (we have keep detailed and honest records of all wins and losses), but they have been time consuming.

FWIW, I had no issues when I only played BJ (and kept transactions under 10 K)...it was the reporting of machine JPs that raised all the red flags.

Whether you should move to the US or not really depends on where you think you would prefer to live and where you think you might have the best opportunities...as an example, I would much rather make 300 K a year and pay 35% tax than make a 100 K a year tax free. I don't know your exact situation, but I would say a move to the US would be fine if your winnings are of the type that stay below radar or if you could increase your above radar winnings enough for the extra hassle. Not sure if this matters to you, but if you play online, you may not be able to access all the same sites with a US address (not that there aren't some ways around this).

[BLUEWATER]

Most casino required you pay taxes if your winning is $1200 or more. You can request to withheld taxes so you don't have to pay later. Play at the table you don't have to pay taxes. More Info at this link. http://lasvegas4newbies.com/chap10-1.html

[gloria460]

I won 3600 at the Hard Rock in Tampa. I received the whole amount but when tax time came around I was hit with a 900.00 tax and no the loss of 3600 did not offset the tax...I ended up owing that year. It was on slots so they take roughly 25% of everything over 1000.00 here.

[me_and_ed]

I won 20k 2 weeks ago playing Mr Big Boss ($2 bet ) in Washington State at Skagit (Native), the took 6k off the top, I am now trying to get my losses from the winners club to try and get back this money. BTW I am in Canada.

[RobWin]

Originally Posted by gloria460

I won 3600 at the Hard Rock in Tampa. I received the whole amount but when tax time came around I was hit with a 900.00 tax and no the loss of 3600 did not offset the tax...I ended up owing that year. It was on slots so they take roughly 25% of everything over 1000.00 here.

Gloria, you definitely need to find yourself a better tax accountant based on what you said above. Re-read Silc's post again too..

[Darem1]

I wanted to clarify a couple of the above postings. First of all, in order to claim losses to the extent of winnings you have to file schedule A along with the 1040. This is the schedule of itemized deductions. If your itemized deductions do not exceed your standard deductions by the losses you in effect do not recoup them, since you would be entitled to whatever the standard deduction amount for your age and marital status would be.
Now, to reference the Mississippi state tax that is always deducted by the Mississippi casinos. Mississippi passed a tax law several years ago that makes
the amount withheld belong to Mississippi and those from other states cannot file an out of state Mississippi return to recoup those taxes. What you can do is to add the amount withheld to your schedule A (if you file one) together with any other state taxes withheld i.e. from a paycheck. The key to recouping your losses is filing that schedule A - itemized deductions with your federal tax return. Keep good records - the best way to do this is to get the players club cards from each casino and you can get a win/loss statement each year to support your losses. You can also use losing dog and horse track tickets, lottery tickets, etc. to support losses. Hope this helps.

[Darem1]

If you do decide to come here, welcome to the United States! But you may want to look into Canada if you can stand the cold. I lived in Canada for not quite a year until the cold weather chased me back to the States, but I found Canada to be nicer, cleaner, safer, the people nicer, etc. Much less nonsense on TV and in the politics. I don't want to seem un-American, I love my country, but I had a wonderful time up in Canada many years ago and I would go back any time they can figure out how to keep it temperate up there, lol. They also have universal health care up there that we may or may never get down here. But you gotta love snow.......and it starts in OCTOBER! At least in Ontario it did.

[4 of a kind]

If you had to pay extra taxes on gambling winnings after all the options available to avoid that, it may not be a bad problem.

I certainly wouldn't mind paying the taxes on the 333 million dollars won today by one person in the lottery.

In the past years whenever I had to pay extra taxes as a result of gambling, it always was a good year.

[AussieGambler21]

Originally Posted by Darem1

If you do decide to come here, welcome to the United States! But you may want to look into Canada if you can stand the cold. I lived in Canada for not quite a year until the cold weather chased me back to the States, but I found Canada to be nicer, cleaner, safer, the people nicer, etc. Much less nonsense on TV and in the politics. I don't want to seem un-American, I love my country, but I had a wonderful time up in Canada many years ago and I would go back any time they can figure out how to keep it temperate up there, lol. They also have universal health care up there that we may or may never get down here. But you gotta love snow.......and it starts in OCTOBER! At least in Ontario it did.

All country options are open for me right now as i would love to live and work in another country and part of that decision for me (a big part anyways) is the view on taxes and gambling and if they do have a tax on gambling how easy it is to do the paperwork and whether you get most of it back in the form of a tax refund.

The only thing that would keep me in Australia right now is my successful entry into the Australian Armed Forces. Although if i was able to somehow get into the US Army, it would be a no brainer and i would fly over tomorrow if i could.

I don't mind the cold at all and have never experienced a white christmas, let alone snow (except once when i was about 12) as i have always lived in a part of Australia which never snows (ever).

I would still consider Canada however i am not too sure about their views on gambling and taxes, how many casinos they have and more importantly how easy it is for Canadians to enter the US, not to mention what their laws are on internet gaming?

On another note thanks for all the info everyone has provided as it has been really helpful