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Time To Get Ready For The Tax Man

January 18, 2013 at 2:07 PM | by | Comments (3)

The new year brings new things. In 2011, this writer got countless Royal Flushes playing video poker. 2012 brought just a few Royal Flushes, but none with a hand pay. Hand pay is always the goal when playing machines because that usually means we won $1,200 or more. That's a pretty nice score. These scores are usually accompanied by a W2G from the tax man.

Even though the tax deadline isn't until April 15, it's time to prepare. Our email tells us this is the case when, earlier this week, Boyd Gaming sent us the first of many emails reminding us that our 2012 win/loss statements were ready. Unfortunately, we can't just get our gambling losses refunded by the IRS. (THAT would be awesome.) Turbo Tax does a good job of explaining the basics:

The IRS does not permit you to simply subtract your losses from your winnings and report your net profit or loss. And if you have a particularly unlucky year, you cannot just deduct your losses without reporting any winnings. If the IRS allowed this, then it's essentially subsidizing taxpayer gambling. The bottom line is that losing money at a casino or the race track does not by itself reduce your tax bill. You need to first owe tax on winnings before a loss deduction is available. Therefore, at best, deducting your losses allows you to avoid paying tax on your winnings, but nothing more.

That last sentence from Turbo Tax is the most important. Gambling tax deductions essentially just offset winnings. For this writer, the best way to look at taxes is to really hope that I have to pay because that means I won more than I lost. Like all taxes, gambling taxes aren't simple and it's always recommended that you talk to a professional.

All casinos offer win/loss statements for your taxes so if you haven't received an email reminder, check your players club website(s) and you will see this year's forms when they're ready.

Comments (3)

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Not your beat, but...

I'm sure some of your readers have chanced into a Mississippi casino or two. It's the one state where if you're a non-resident and your only income was gambling winnings, you're not allowed to file a tax return, much less get a refund on taxes collected by the casino.

I used to support professional tax prep software, and this was one of the most confusing thing accountants dealt with, much less non-professionals.

Bottom line, if you win $10,000 one day and the casino withholds tax on it, it doesn't matter that the next day you lost $20,000. You're never going to see that tax money again.

Mississippi has come upon a brilliant tax strategy - tax people who can't vote.

mlife tax slips

Anyone know when mlife ones are typically available?  Have a couple years returns ready to go.... Considering waiting to also file 2012..

@jsv1983

I'm not sure, the website never works for me. Sorry.

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