hi and welcome to our instructional video
that is designed to make you smarter gambler my name is Steve Bourie
on the author of the American casino guide which is the number one
bestselling book in the US
on the subject of casino gambling and travel and the
only book that comes with more than one thousand dollars in casino coupons
if you want to know more about the book be sure to visit our website at
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be sure to download our free app just go to the app store and search for
American casino guide
in this video I speak with gambling author Jean Scott about gambling and
taxes
jean is the author of numerous books on casino gambling including
the frugal gambler frugal video poker and tax help for gamblers
if you've ever wondered what taxes are owed money when a large jackpot in US
casino
and how you can deduct gambling losses then this video will explain it to you
now here's my interview with Jean Scott
you have to pay taxes on everything you win in a casino
the IRS likes
everything reported every sort of gambling
all and outta casinos whether it's bingo
lotteries raffles I'll
whether you're playing in a casino on a cruise ship out in the ocean
whether you're in a foreign country casino whether you're in a Native
American casino
and the United States the IRS is also concerned with
online gambling particularly but
much to some people surprise it does not matter whether the gambling
online is legal or illegal the IRS does not make any difference
they want you to report all gambling in all places in the world
or in cyberspace or
legal or illegal do you have to report your gaming action to the IRS
even if you are a net loser at the end of the year the IRS
wants to know all about your gambling action
and probably one of the biggest myth is
if you lose by the end of the year
you look at the whole year you say I one sometimes I lost sometimes
but in the long run I'm a net loser
people think they don't have to report this
is not true because the IRS wants you
to keep track each incident
gambling whether it's a session in a casino r1
and said that when you wanna the lottery or whatever
and they want you to keep a record I love
all of those separately so at the end of the year
you will have lots of winning sessions
or winning incidents and then you'll have lots of losing
sessions or times that you lost
the IRS specifically says in the instruction manual
that you cannot reduce your wins by your losses
and give a net total what the end of the year what are the IRS's record-keeping
Requirements
because the IRS wants to know all of your action the only way that you can
fulfill their requirements is by keeping some sort of the gambling record
it might be a diary friends tense I use
a little booklet that's a calendar and each day I gamble I put down
where I gambled what I played whether I wanna /url of
a the more technical people might keep one in their smartphone or on their iPad
or so forth I some people have a lab rat computer records
but and that at the end of the day if you're ever audited
the IRS wants to know all your winning goals
and all year losing days and and that is how you report them on your
income tax form if you don't keep the gambling diary
can you estimate your wins and losses for the year people who do not gamble
too much
light be able to get by with that if they are %ah did
particularly they couldn't get
go back to the casinos where they gambled and they can get what we call a
win-loss
statement from each casino if
your gambling is not extensive sometimes
be IRS will accept that and on it
but on the whole if you have fairly elaborate
a I record are don't have fairly elaborate records
a the IRS is gonna say those when lost eight months are
very valuable if they're not backed up by
a diary or some other computer record
because their notoriously inaccurate their incomplete
and if its machine play that your and doing
if you don't play with your players card in the casino doesn't
can't give you a an Acura when loss statement because they don't know how
much you won or lost
how does the IRS know what you win
the IRS doesn't know every little gambling transactions
have every person that's gambling and the United States or wherever their camp
link
but there are ways that the IRS can find out and does
one is if you are a table games player
there's not as much paperwork as if you're a machine player but they're
are rules and regulations that the casino has two
keep paperwork when people cachet and
by hand or cash and chips love
a it starts at three thousand for sure
from ten thousand up that there's gonna be paperwork but
many casinos at it starts a lot earlier than that at three thousand
now when you're a machine player that
there's a very specific the limit
if you play a machine and you get a jackpot
twelve hundred dollars or more this is going to be
generate at up document called a double A to G
you are going to get that add there's nothing you can do about it
and just as a note here you better
put that amount as part of your income
if not you're gonna get a letter so fast
from the IRS and they're going to just assume that you forgot to put it on and
they're gonna tax you on it anyway so you might as well put it on
and savon ot what is the process when you win a taxable amount
when you hit a jackpot of 12 hunter
or more the machine is going to lock up
now I I can say that in some casinos
it will lock up on smaller jackpots like a thousand dollars
that will not generated w/ 2gb but starting at 1200 and above
that's gonna generate a debit to GE said the machine locks up
the employees some employees comes and you have to show
two things you have to show your ID and then you have to either
show your Social Security card with your number
or it depends on the casino you might
just be able to give them your social security number
verbally and sometimes they give you a piece a paper
to write it down so that you don't have to say it verbally and maybe somebody
around you would hear it
%uh right this presents a question
and a lot of people's mind they sat on what a whole I don't want to carry my
social security card
I how did they know that the number I'm giving to you
is correct well they sometimes will have you
they'll bring something called a Debian earning and on that you're right down
your social security number
you'll sign your name which is your sway ring that
that is under oath fierce wearing that bad is your social security number
then that takes the casino off the hook
by having a the a sending unit at false
social security number and back to what happens next after they take care of all
that
then they come and bring you back your money and that's the happy time
one note here the IRS expects you
to put all your gambling lens and whether you get paperwork
or not so just because you don't get W two g's
all your jackpots are under that 1200
threshold that doesn't mean that you're not supposed to count those
what if you don't want to give the casino your social security number
when you when a taxable jackpot you do not have to give the casino your social
security number
when you hit at twelve hundred dollar and above jackpot
however if they're going to take 28 percent
out at that jackpot and send it to the IRS
and you might say okay well that'll just be withheld
I there is a problem because
they don't know who that jackpot is that 28 percent
well just be lost to you and a related question today somebody says well I
don't like to give my ID
why do they need my ID well her
why you need your ideas they will not give you a jackpot
and tail they see ballot ideal
at you can't get away with this no way no how
is there more than one way to report your gambling wins and losses on your
federal income tax return
we've talked about what the IRS requires as far as record-keeping now what
happens when you go to fill out your income tax form at the end of the year
there are several different ways that you can handle your taxes
first there's two main categories: there's recreational gamblers
and thats most of the people I who gamble
and then there are professional gamblers do it differently
let's talk about the recreational first
the logical way and the way the IRS one said
as you would add up all your winning days
and and one total and put that under
on page one under other income and then you would market
a gambling winnings then here's where it divides
if you're a person who doesn't I have my
is then you're kinda stuck because
if you itemize you can put your losses as ms. Elaine ES deduction
however if you don't have a lot of other deductions
then you're gonna lose your automatic deduction so it really puts up I
a low-income person I in a bind because
what's going to happen is let's say
UN a four thousand dollar Royle
I know dollar machine you have to put that is income
but you play the rest of the year and you lost all that four thousand on a lot
more
but you don't itemize well then you can't take anything off to deduct your
not pay
whatever bracket you're in you're gonna pay taxes on that whole four thousand
dollars
now if somebody has a bigger income they have allotted deductions maybe they have
a mortgage
that they a deducted a lot of other taxes and so forth
they could put that four thousand dollars is income
and then if they didn't have losses a four thousand or more they can deduct
4,000
now Nick I know your next question is all right let's say you
you won four thousand that one time but the rest a year you lost 6,000
can you put the 6,000 as a deduction know the IRS has a little rule here
that you can't take more losses then you wont
so you can take the four thousand income and four thousand
deductions but that's all you can take that at least
saves you from paying taxes on money that you didn't
actually weekend in the long term that you lost in the long term
on the other hand if you're a professional and let me tell you it's
very hard to get the IRS
to accept you as a professional but if you make a lot of money gambling
your kind of all time gambler and and your gambling a lot
and high-stakes in fact you're making your living or a good part if you're
living
gambling then you file as a professional as a business
then you would do a schedule C and your wins and losses would be
on the schedule C others the same rule
even with professionals you can't take more losses
than your weekends but let's say you were a big gambler and you won 20,000
and your loss 30,000 I
you can break you could break even you can't take that 30,000 loss against
other
I income but then you don't have to put back twenty thousand you want
over on that page 1 under other income
I'll a lot of people would like to count themselves as professional Inc
a professional gamblers I but the IRS has really strict standards for this
besides federal taxes are there other kinds of taxes on gambling winnings
once you had figured out how you should file on your federal return you might
think your troubles are over
no not true because if you are a resident of the state are played in this
state
that floor now looking for new sources of income
they are now charging
state tax and some have them go so far
as to take that tax out right when you hit the jackpot
so frances we worrisome a playing
Indiana we live in Nevada we're not used to having money taken out of our
jackpots
in indiana every time we hit a jackpot over twelve hundred dollars
they took 3.4 percent out
this is that killer for many many gamblers
because some states in the annie is 10
that's where we used to live that's one reason why we live in Nevada now
Indiana takes all your way ends
just like the federal as income but they don't allow you to deduct anything
and so everything you we n
is not peer winnings everybody knows that you had a
at two thousand dollar jackpot new
you may have lost that whole thing by the end of the day if you play long
enough for at least by the end of the week in the month
so a lot of Midwest states and it's getting more clear across the United
States
but the problem with this is I
like if you play in indiana you're not going to get that tax back
it's gone now Brad and I get that tax back because we're professional gamblers
and there's different rules for that
so you may say well how do I know
like another example is mississippi somebody else a
I went to Mississippi and they took a tax out they called it a
at gambling's state tax not a state income tax
and they say I can even get that back that is true
that's what happens so every state has their own rules
and they have sometimes different rules for somebody who lives in the stadium is
a resident
and for somebody who comes in and plays in that state
it's too long and complicated I have a whole chapter
and this is it at time that I I guess I should mention my book
I'm not trying just to sell books I'm trying to give information
but in this case I need to refer you to my book tax help for gamblers
because I have a whole chapter and then a whole list
I'm all the fifty states and how they handle
gambling taxes and everyone is a little bit different
all right we mentioned federal taxes we talked about state taxes
now there's a new wrinkle that some cities
are going to start taxing gambling winnings
there are some new casinos in Ohio
and almost all the cities where these
news casinos are are going to
take out taxes or at least charge tax
for city taxes as well as state taxes and federal
so I and Yahoo at your gonna be stack
and I think in the future you better check on this because I
I think all the city's and the states are
so broke these days that they're looking for new sources of income
and gambling is always a good hit because thats
a syntax
if you wanna learn more about me and my books including tax help for gamblers
you may go to my website queena comstock com
there there's a summary of all my books and products
and also you can order them there
you might want to say oh well I'll what about
things that happen in that tax world and its
it's not in your book it's something new well then you can go to my blog
and back on that queena comstock com there's a link to my blog
and if there's something new on the tax fraud I'll discuss it there
don't forget that you can see more of our educational gaming videos on our
YouTube channel
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