I know it. You know it. They know it: The government wants to tax you as much as possible. But Uncle Sam might not be entitled to as much of your slot winnings as you think! In this post, we’ll get a little bit into tax law as it applies to casinos and slot winnings. Specifically, we’ll discuss how to report your wins, how to write off your losses, and most importantly… I will stress that I am NOT a tax accountant, and I’ll recommend that you find one before you proceed with ANYTHING!
So first, the wins: If you’re going to follow everything to the letter of the law, you’re really supposed to declare ALL your wins, even one dollar wins, as income, but casinos will only report your wins to the IRS if you hit a jackpot that exceeds $1,200. (That’s what happened to me when I won this jackpot, and this one, and these ones too – have a watch if you haven’t seen them yet.) Still, every state and casino handles this a little bit differently. Some will hold back your taxes before they pay out your jackpot. Others won’t, and those ones will instead leave it to YOU to claim those wins in your next tax return. Still others will let YOU decide if you want to have those taxes deducted upfront, or if you’re going to claim those later. (To make that decision, it really depends on if you think you’re going to be in the red or in the black by year-end.) Think you’re exempt from taxes if you win a handpay on cruise ship in international waters? Think again! I still received a tax form from the casino when I won in the Baltic Sea! Whatever the case, if you’re curious about a particular casino’s policy, it’s always best to check with that casino about their specifics.
Writing off your losses is a different story: You’re allowed to do it, of course, but you need to prove your losses somehow. There are a few ways you can do this, but according to the IRS’ own website…
You must keep an accurate diary or similar record of your losses and winnings. Your diary should contain at least the following information.
· The date and type of your specific wager or wagering activity.
· The name and address or location of the gambling establishment.
· The names of other persons present with you at the gambling establishment.
· The amount(s) you won or lost.
There are a few other details there on their site too, and most of the requirements seem kind of crazy, but if you don’t follow them, don’t say I didn’t warn you! You never know who the IRS is going to come after if you don’t file correctly. Fortunately for me (or maybe unfortunately?), I have video evidence of one of my most devastating $100K loss runs – you’ll want to have a look at it here if you haven’t seen it yet. Still, at least the IRS can’t take that money from me anymore, ha.
Finally, here’s an important thing I’d like you to do: PRINT this blog post on actual paper. Then, run it through a shredder – who the hell am I, anyway? Why would you trust a stranger on the internet with something as important as tax law? Lol! Instead, if you’re really serious about this topic, CONSULT WITH A REGISTERED ACCOUNTANT WHO SPECIALIZES IN THIS TYPE OF THING. I really can’t stress this enough. You can use this post as a guideline, but when it comes to brass tax (pun intended), please, please, please, I implore you to work with a professional. Then you can rest easy the next time things go BOOM for you at the casino. Or, you can just use my free app to play with pretend money instead; then, you don’t have to worry about real wins or losses at all. But whatever you decide to do, play smart and have fun!