- Joined
- Mar 12, 2007
- Location
- Pennsylvania
So I'm trying to figure out how much I am going to owe in taxes... any advice on how I can figure this out? I'm 20 and made roughly 8,000 this year.
Online winnings taxes?
- Thread starter JlSpitFirelC
- Start date
- Joined
- Feb 8, 2007
- Location
- US of A
Did you get a 1099 from misc. gambling?
- Joined
- Apr 24, 2004
- Location
- A Vault!
If you have kept up with your losses and what you have spent in gambling this year then you can wash those against your winnings but no more that what your winnings were...so in that respect you may not owe a dime if you have had as much in losses or more than your winnings amounted to !!
Almost what Rob said but you would have to be a professional.
Here is the Tax Code for the non-professional. I wish this Code would be changed to be more practical:
Link Removed ( Old/Invalid)
"First, let's examine the situation for the casual (or non-professional) gambler. The Tax Code requires gamblers to record their wins and losses by session. You take all of your winning sessions for the year, add them together, and you come up with a result. Let's assume that's $12,000.00. Then you take all your losing sessions, add those up, and come up with a second number. Let's further assume that's $10,000. However, you cannot net those two numbers! The wins go as part of Other Income (line 21) while the losses are an itemizable deduction (Schedule A) not subject to the 2% AGI limitation on itemized deductions.
Well, you're probably thinking that there's no particular difference between netting and this result. That's wrong, for three reasons. First, if you don't itemize your deductions (because you don't have enough deductions to itemize) you lose out on your gambling losses. In such a situation your gambling losses are presumed to be part of your standard deduction. Second, many items on the tax return are tied to Adjusted Gross Income (AGI). The prescribed method for handling gambling income and losses increases AGI (even if the taxable income remains unchanged). This can limit some taxpayers' other deductions, including medical and miscellaneous itemized deductions. Finally, gambling losses can, in certain circumstances, trigger the dreaded Alternative Minimum Tax (AMT). And gambling losses aren't deductible in the AMT............"
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Here is the Tax Code for the non-professional. I wish this Code would be changed to be more practical:
Link Removed ( Old/Invalid)
"First, let's examine the situation for the casual (or non-professional) gambler. The Tax Code requires gamblers to record their wins and losses by session. You take all of your winning sessions for the year, add them together, and you come up with a result. Let's assume that's $12,000.00. Then you take all your losing sessions, add those up, and come up with a second number. Let's further assume that's $10,000. However, you cannot net those two numbers! The wins go as part of Other Income (line 21) while the losses are an itemizable deduction (Schedule A) not subject to the 2% AGI limitation on itemized deductions.
Well, you're probably thinking that there's no particular difference between netting and this result. That's wrong, for three reasons. First, if you don't itemize your deductions (because you don't have enough deductions to itemize) you lose out on your gambling losses. In such a situation your gambling losses are presumed to be part of your standard deduction. Second, many items on the tax return are tied to Adjusted Gross Income (AGI). The prescribed method for handling gambling income and losses increases AGI (even if the taxable income remains unchanged). This can limit some taxpayers' other deductions, including medical and miscellaneous itemized deductions. Finally, gambling losses can, in certain circumstances, trigger the dreaded Alternative Minimum Tax (AMT). And gambling losses aren't deductible in the AMT............"
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- Joined
- Feb 2, 2006
- Location
- TN
FYI, it'd be in your best interest to contact a CPA as the IRS seems to change the rules as they see fit as to what is considered a legitimate recording of a loss.
As mentioned previously, if you didn't get a W2G or a 1099 from a casino I wouldn't worry about it. Might find yourself in more trouble trying to be an honest citizen, especially when it comes to online gambling, more so in certain states.
As mentioned previously, if you didn't get a W2G or a 1099 from a casino I wouldn't worry about it. Might find yourself in more trouble trying to be an honest citizen, especially when it comes to online gambling, more so in certain states.
Yep, just didn't feel like typing that redundant disclaimer again....Also, ask the same question to 5 CPA's/Accountants and a good chance you will get 5 different answers
I completely disagree with your first sentence and almost completely agree with your second sentence except I would not limit it to just online gambling and/or state. Sucks,huh!!
- Joined
- Sep 18, 2004
- Location
- California
Ugh, CPAs/accountants who disagree amongst themselves.............boy do I hate it when that happens 
Must be why the tax code was written......
and I love the "your Honor, I didn't get a 1099" defense :notworthy
Must be why the tax code was written......and I love the "your Honor, I didn't get a 1099" defense :notworthy
- Joined
- Mar 13, 2008
- Location
- Ontario
Only a little off OP
Okay, before I digress, I would suggest you use a tax software, based on 2008 to estimate your taxes without filing (this will be free), so you know how big a bill to be saving for in April, 2009
In Canada, gambling winnings are considered a "winfall". Ditto horsebets, lottery winnings and bingo. And gameshow winnings.
I was working as a legal secretary in the late 1970's when a case Revenue Canada (our IRS equivalent) was looking for taxes from a horse gambler who had won $45,000 circa 1973 went all the way to the Supreme Court of Canada, who ruled that Revenue Canada did indeed have a right to claim taxes on his gambling winnings, provided that gambling losses were allowed. Not just for this fellow, but for all gamblers. If gambling was a business, then gambling losses were an acceptable business expense.
Revenue Canada decided that there were more losers than winners, and dropped the case.
Most Canadians who win at US land based casinos are eligible for a refund.
Do not pay an agency to do this, the casinos are very helpful in providing you with the proper paperwork.
But if you are a US player playing from a non-banned site, I highly recommend you tell the IRS about your winnings. It is taxable income in the US, and hence the machines where the jackpot is $1199. The IRS has more power to investigate income than DEA, FBI and state and municipal police combined.
Governments do not like when you owe them money.
If you US citizens come north and gamble, we will not deduct any taxes from your winnings. But it is your obligation to report it to customs as you re-enter the US, (ya, right). And there is something really stinky about withholding funds from a win, when you (probably) are not up overall that much.
There are many more folks from the US more conversant with your laws than me, but I just wanted to put in my perspective.
Okay, before I digress, I would suggest you use a tax software, based on 2008 to estimate your taxes without filing (this will be free), so you know how big a bill to be saving for in April, 2009
In Canada, gambling winnings are considered a "winfall". Ditto horsebets, lottery winnings and bingo. And gameshow winnings.
I was working as a legal secretary in the late 1970's when a case Revenue Canada (our IRS equivalent) was looking for taxes from a horse gambler who had won $45,000 circa 1973 went all the way to the Supreme Court of Canada, who ruled that Revenue Canada did indeed have a right to claim taxes on his gambling winnings, provided that gambling losses were allowed. Not just for this fellow, but for all gamblers. If gambling was a business, then gambling losses were an acceptable business expense.
Revenue Canada decided that there were more losers than winners, and dropped the case.
Most Canadians who win at US land based casinos are eligible for a refund.
Do not pay an agency to do this, the casinos are very helpful in providing you with the proper paperwork.
But if you are a US player playing from a non-banned site, I highly recommend you tell the IRS about your winnings. It is taxable income in the US, and hence the machines where the jackpot is $1199. The IRS has more power to investigate income than DEA, FBI and state and municipal police combined.
Governments do not like when you owe them money.
If you US citizens come north and gamble, we will not deduct any taxes from your winnings. But it is your obligation to report it to customs as you re-enter the US, (ya, right). And there is something really stinky about withholding funds from a win, when you (probably) are not up overall that much.
There are many more folks from the US more conversant with your laws than me, but I just wanted to put in my perspective.
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- Joined
- Sep 13, 2005
- Location
- Australia
Move to Oz mate, no taxes on gambling winnings
- Joined
- Jul 24, 2008
- Location
- Great Southern Land
Move to Oz mate, no taxes on gambling winnings
Damn right...I was chuckling at the irony that the US blackballs online play and then expects to tax its citizens based on their online wins!
Most amusing
Wooof
I don't know if they still do this in Atlantic City anymore but in the past , if you won more than $2500 you can ask for the taxes to be deducted at the time of your win and they are sent directly to the IRS. That's what I would do. Same with the lottery, I would pay it all up front and not worry about it because if you win tons and you just plop it in a savings account, you will also have to pay taxes on the interest if your not smart enough to put your winnings into a tax shelter
Does anyone know if this has changed?
Does anyone know if this has changed?
- Joined
- Sep 20, 2005
- Location
- Left Hungary
Why would you claim this if you haven't received a W-G form from the casino online? I know for a fact they do not send these since I have won above the limit for a wager and never have claimed any online winnings to date.
Now, if you made this at a landbased, you will get this form and will need to be claimed since it will be sent to the IRS.
Rusty
Banned User - repetitive flaming
- Joined
- Jul 23, 2006
- Location
- Manchester UK
The fact that I agree with Dogboy is worthy of comment in itself, your tax law is obscene!
I am tempted to ask why you would even declare any winnings but no doubt your intrusive Government audits your Bank accounts etc.
That treatment is reserved for people who pay no tax at all over here.
What is truly bizarre to me is that you may win $50,000 One Year but then lose twice that amount the next and never win again.
So can you claim your tax back when you lose because it is supposed to be a capital gains tax?
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
My parents go to Atlantic City once every 2-3 weeks and I'm pretty sure it hasn't changed.
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
I read all the comments.. Really surprised at how many responses there were.
Many of the replies were different though... I had won roughly 13,500, but lost 4,500.. I was paid at one point in a giant 12,000 lump.. But no online casino sent me any forms.. Some people said don't worry about it if I didn't get a form, but most others said get a w2g and a 1099..
So my end result would be roughly 8,000, but from that I'm curious as to how much gets taxed..
Should I get the old '08 forms for w-2g and 1099 because I really don't think evading the irs is in my best interest :/
Many of the replies were different though... I had won roughly 13,500, but lost 4,500.. I was paid at one point in a giant 12,000 lump.. But no online casino sent me any forms.. Some people said don't worry about it if I didn't get a form, but most others said get a w2g and a 1099..
So my end result would be roughly 8,000, but from that I'm curious as to how much gets taxed..
Should I get the old '08 forms for w-2g and 1099 because I really don't think evading the irs is in my best interest :/
- Joined
- Apr 24, 2004
- Location
- A Vault!
Babs, I'm surprised at you...have you not been paying your taxes all these years that you have been playing online for all of your cashouts,,,
- Joined
- Sep 20, 2005
- Location
- Left Hungary
The reason not to worry is only if it is an ONLINE casino winnings. They do NOT send out W-G forms (wagering wins) not 1099's which is miscelleneous income...only.
You will NOT get either of these forms from online casinos. This should not be claimed unless you are willing to let the IRS know you gamble online...and then you open up a can of worms on PROVING how much you won/spent for no reason at all. They do NOT know you are winning/losing for no one has reported you to them from any ONLINE casino.
Now, if it is a landbased casino...this is a different story. You will receive a W-G form for anything above $1199.00. This is documented and a copy is sent to the IRS. So this MUST be claimed.
I have claimed all winnings from casinos and horse racing for many years, but have never claimed any wins from online because I have no documentation to show that I won/lost this amount.
So if you choose to report income without documentation...be very , very careful.
PS, I am not an accountant, tax preparer or lawyer...do what you feel you need to do. Just general info given here.
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
So in a non-accountant / lawyer perspective.. I'd be safer not reporting as a taxable income / prize?
I don't think my parents would be too happy about that though..
I should add.. I never did my own taxes before and I am oblivious to the system.
I don't think my parents would be too happy about that though..
I should add.. I never did my own taxes before and I am oblivious to the system.
- Joined
- Apr 24, 2004
- Location
- A Vault!
After all of the advice/opinions you have received in this thread here, I imagine you are most likely confused really good right now...your best bet at this point since you are obviously worried about doing the right thing in your mind would be to simply pick up the phone and call the IRS and ask them what you should do. Or you could always ask your parents...
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
If I call the IRS won't they just say give us your money and stop gambling online?
- Joined
- Sep 20, 2005
- Location
- Left Hungary
Too funny..of course they will!
- Joined
- Apr 24, 2004
- Location
- A Vault!
The IRS can only ask or enforce you to pay what they consider is rightfully theirs, and there again it would depend on how you file and they have no legal enforcement as far as online gambling goes but the DOJ does think that they do !!
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
Big Brothers watching
Thing is... I have been talking to my parents, but they are confused about online winnings also.
Wish I could just forget about it :/
- Joined
- Jun 30, 1998
- Location
- Bierland
I'd call the IRS. Big brother or not, I've had to call them a number of times concerning my complicated tax situations. I've found them VERY helpful and friendly. And in no way did I feel that they were being intrusive or taking down notes on what I was asking etc.
If you feel uncomfortable, just tell them you're calling for a friend who has some tax questions
GrandMaster
Dormant account
- Joined
- Jan 21, 2004
- Location
- UK
You can put drug dealer as your occupation if you wish and the IRS will happily take its cut. Remember that Alphonse Gabriel Capone was done for income tax evasion, not for racketeering. You don't have to specify online gambling as the source of the income, you can just write gambling.
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
Ok.. I like that answer
.. now.. which form(s) would I need to claim my source of income as gambling?and any idea on how much money I should safely set aside? I'm the most nervous about that.
- Joined
- Feb 18, 2005
- Location
- Arizona
File a Form 1040. On line 21 is an entry for "Other Income." That's where you state the source of the income (gambling winnings) and the total amount for the year. Then on Schedule A you can claim the total amount of your gambling losses for the year on line 28: "Other Miscellaneous Deductions."Ok.. I like that answer
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
Great.. thanks a lot
- Joined
- Feb 18, 2005
- Location
- Arizona
Hey JlSpitFirelC,
I should add a little bit to my previous answer. Depending on your situation it may be better for you not to itemize deductions, if the total amount of your losing sessions for the year do not reach a certain threshold, in which case it will be better for you to claim the standard deduction. You'll just have to do some basic calculations at the end of the year to figure out which approach is best.
And certainly, if you only had ONE deposit into this casino and ONE withdrawal out, and those were your only transactions with online casinos for the ENTIRE tax year, then you should not itemize deductions. In that case just put down the $8000 win in the "other income" entry of Form 1040 and take the standard deduction (assuming you qualify).
I should add a little bit to my previous answer. Depending on your situation it may be better for you not to itemize deductions, if the total amount of your losing sessions for the year do not reach a certain threshold, in which case it will be better for you to claim the standard deduction. You'll just have to do some basic calculations at the end of the year to figure out which approach is best.
And certainly, if you only had ONE deposit into this casino and ONE withdrawal out, and those were your only transactions with online casinos for the ENTIRE tax year, then you should not itemize deductions. In that case just put down the $8000 win in the "other income" entry of Form 1040 and take the standard deduction (assuming you qualify).
- Joined
- Mar 12, 2007
- Location
- Pennsylvania
Went to HR Block today.. told them how much and everything.. took them about 10 mins and they told me.. that after subtracting my losses, on the 8-9000 I have left, only roughly $800 will be taken
Plus it seemed completely vacant so the employee didn't charge me anything!
Plus it seemed completely vacant so the employee didn't charge me anything!
