Paying taxes on online casino winnings in the united states

[marynerzfan]

I'm wondering if a person does win a substantial amout and
wishes to withdraw, how is it possible for the feds not to know
about illegal online gambling. I guess i'm alittle confused about this
issue. The way I see it is if you withdraw say under 1200.00
american dollars do you still have to file a w2g with the irs. I won
a substantial (i think) amount but i'm scared to death to even try
to deposit any of it into my bank account.

Hello everyone and what a great forum!

 

[winbig]

I'm wondering if a person does win a substantial amout and
wishes to withdraw, how is it possible for the feds not to know
about illegal online gambling. I guess i'm alittle confused about this
issue. The way I see it is if you withdraw say under 1200.00
american dollars do you still have to file a w2g with the irs. I won
a substantial (i think) amount but i'm scared to death to even try
to deposit any of it into my bank account.

Hello everyone and what a great forum!

Welcome to the forum

edit: I just noticed that you live in WA. You do realize that it's a felony to gamble online where you live? Be very careful if you continue to do so....

But, in response to your question...





As far as I know, $3,000 is the cutoff point for the banks when it comes to wire transfers/ACH. So in other words, if you get anything under $3K, they're not required by law to report it. I could be wrong, but I think this is one of the main reasons that a lot of well respected casinos have a monthly cashout limit < $3,000.

Even then, I really doubt one transfer is going to raise a red flag.

Your best bet is to get a check, and if you want to keep the bank out of the loop, take it to a check cashing store. Even better, if it's for under $1500, take it to wal-mart. They only charge $3 max to cash a check..just tell them it's a payroll check and they won't ask any questions.

Also, the $1200 you mention only applies to land-based casinos. You can really tell where that law is in effect by some of the jackpots....like here in Philadelphia, there are quite a few slots that have jackpots of $1199

I'm really not sure that Nevada has the same rules, because I've never seen a slot machine with the "$1200 disclaimer" when I've been to Vegas. IMO they'd need a full-time team to go around to hand pay everyone that hits anything over $1200.

 

[NASHVEGAS]

I'm wondering if a person does win a substantial amout and
wishes to withdraw, how is it possible for the feds not to know
about illegal online gambling. I guess i'm alittle confused about this
issue. The way I see it is if you withdraw say under 1200.00
american dollars do you still have to file a w2g with the irs. I won
a substantial (i think) amount but i'm scared to death to even try
to deposit any of it into my bank account.

Hello everyone and what a great forum!

Did you mean a 1099G??...The casino would issue a 1099G if it was required, (and just on non table games) and you do not have to attach a 1099, only a W-2 to your Return if you are itemizing which would be most likely....Simple,not really as almost impossible to comply. All winning wagers are to be declared as income and all losing wagers can be declared as an expense in order to offset any gambling income. However, gambling losses in excess of gambling income are not deductible. Gambling losses can not be carried foward or back in to another year. Most believe and wrongly do nothing during any subject year where gambling losses exceed gambling wins. Doing nothing is wrong as all gambling income must be reported in the subject year regardless as it effects or could effect your AGI so your losses may or may not be a dollar for dollar deduction. Keep detailed records of all pursuant to gambling!!!

DISCLAIMER:ALL THAT SAID, SEEK ADVICE FROM THE PROPER COUNSEL AS I AM NOT AN ACCOUNTANT,LAWYER ET AL. AND THIS IS ONE SUBJECT WHERE THERE ARE MANY PRIOR INACCURATE POSTS IN REGARDS!! Sorry for yelling!!

This is all I will say on another subject that is inter related. Structuring is a felony. I will not do it period nor discuss it including email as the subpoenaing of electronic information is growing exponentially and quite common plus a PIA.

Your state is not fond of online gambling iirc!!

Good Luck!!

 

[marynerzfan]

Thanks for your advice

I'm level headed and won't to anything that would present
me with a lawyer and a jail term, not to mention all that extra
cash i'd have to pay the lawyer and the courts! Much more
than I'd ever lose in gambling my whole life
Life is good and thanks for your help folks....

 

[Glob]

This is all I will say on another subject that is inter related. Structuring is a felony.

I'm still trying to learn all the lingo and such.

What is "structuring"? Hypothetically, of course.

 

[winbig]

I'm still trying to learn all the lingo and such.

What is "structuring"? Hypothetically, of course.

In a nutshell? Getting around reporting, or paying taxes on, income.

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[EasyRhino]

SO MUCH BAD INFORMATION.

a) There is not, and never has been, any clear indication if online casino gambling or poker is illegal (sports betting, almost definitely, but that's another story). It is only illegal for banks to participate in the funding of illegal gambling.

b) You are supposed to pay taxes on all gambling winnings, regardless of source, and regardless of whether any tax forms are generated. You are also supposed to deduct all gambling losses, regardless of source, up to but not exceeding the amount of your winnings.

This would mean declaring winnings and losses from online gaming, and brick and mortar gaming that falls below tax form thresholds. This would mean keeping a pretty extensive log.

I'm not saying this is a commonly followed law, but it's fairly clearly stated.

c) The form you get from a machine jackpot at a brick and mortar casino is a W-2G, and it happens with payouts $1200 or up.

d) Banks are under no requirement to report check, wire or ACH transactoins of any dollar amount. Cash transactions over $10k can produce a CTR form, which is mainly an anti money laundering device, but fairly routine.

e) A bank MAY produce a suspicious activity report (SAR) for ANY size transaction from ANY source. $3,000 may be used as a "rule of thumb", but it is by no means necessary. I've heard these are actually very common. There's nothing to really be done about these being generated or not, so as long as you're not sports betting, I would simply ignore the possibility, and proceed with your regular banking transactions.

 

[winbig]

c) The form you get from a machine jackpot at a brick and mortar casino is a W-2G, and it happens with payouts $1200 or up.

d) Banks are under no requirement to report check, wire or ACH transactoins of any dollar amount. Cash transactions over $10k can produce a CTR form, which is mainly an anti money laundering device, but fairly routine.

c) Not always true. Have you ever heard of someone getting a W-2G in Vegas for a $1200 hit? I haven't.

d) It's my understanding that ANY transaction >= $10K is reported directly to the IRS. That's the one thing I HAVE seen in Vegas. Every spot at the cage (At least Bally's) has a sign saying something to the sort of "Any transaction - or combined transactions - totaling 10K or over blah blah blah."