Around the beginning of the year I begin to get an influx of questions about taxes. I also begin to see conversations about taxes on various forums and social media groups around taxes. When the questions are unique, I do tend to do posts here because I don’t want to just rehash the great work others are doing.
I tend to see a lot of bad advice given as “I know because I get handpays,” and while I’m not an accountant, it’s also very easy to see what is required, as the IRS has a page on their site about it.
For instance, many players who only get a handpay very irregularly may not realize that if they don’t itemize deductions on their tax returns, they can’t claim gambling losses against their winnings. With the expansion of the standard deduction a couple of years ago, some players who were able to itemize suddenly found themselves in a position where they could no longer itemize.
Many also think win/loss records from the casino are enough to prove gambling losses, but the IRS says otherwise:
To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.
Now, these issues will only truly come into play when an audit is involved, but gamblers with more winnings written off are going to be one of those indicators to the IRS that an audit may be worth it.
So, all that said, I’d love to turn your attention for a few minutes to this new video from the team at the American Casino Guide book, who interviewed Russell Fox about gambling and taxes as they stand now. (They’ve interviewed Russell in the past, and this serves as an update to that content.)
Covered here are some key topics such as:
- How winnings and losses are supposed to be recorded for tax purposes
- How some states don’t let you deduct losses against your winnings
- Electronic table games vs. live table games
- Online gambling and how that reporting may happen differently to states
- State and city taxes and how they work, especially when gambling out of state
There’s a lot of great information packed into this video, so if you’re curious about taxes and how they work surrounding gambling, this video will help address a lot of those topics!