How much can a person win in a casino without paying taxes?

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hoyaguru

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Jun 9, 2003
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I've heard that if you hit a big jackpot at a casino, or if you have a good run at a table and win a bunch of chips, when you go up to the cashier window to cash out, they will give you some IRS paperwork to fill out, which they then submit to the IRS. When tax time comes around, if you don't declare these winnings, the IRS will know it. But, it is only above a certain amount. Last time I was in Atlantic City, I noiced the cash machines where you can cash out the tickets* from slot machines would only cash out up to $3000, if your ticket was for more than that you had to go to the cashier. So, I'm guessing $3000 is the magic number, but it could also be a limit so the cash machine doesn't run out of money too fast. So, does anyone know what the amount is?

*Slot machines don't pay out in coins or tokens any more, they print out a ticket that shows your winnings, which you an feed into another machine, or stick into a cash out machine to get your money.





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Mike Gayner

Diamond Member
Jan 5, 2007
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Where I'm from you don't pay tax on windfalls, because getting lucky shouldn't be a taxable activity.
 

hoyaguru

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Where I'm from you don't pay tax on windfalls, because getting lucky shouldn't be a taxable activity.
Well, I could be wrong, but I think it is considered capital gains, and everyone is SUPPOSED to have any and all gambling winnings on their taxes each year (though I doubt anyone does). So when someone makes a big amount, the casino "helps" them by having them fill out paperwork. The thing that bothers me about that is, say the magic amount is $5000. What if the gambler started off with $4000? How can the casino prove that it is all winnings?
 

mmntech

Lifer
Sep 20, 2007
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The provincial governments in Canada own most of the casinos and lotteries here so winnings are not taxed at all. But, any interest you make on that money once it's in the bank can be taxed. Native reserves own the rest of the casinos, so they're tax free as well.
 

Colt45

Lifer
Apr 18, 2001
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Don't think you get charged here. But the house always wins, and they get taxed.

So.. casinos win, govn't wins, most folk lose.
 

Six

Senior member
Feb 29, 2000
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At one of the Indian casinos in San Diego, the magic number is $10,000 for table games. I know of a guy who won $180K one year, but didn't have to pay taxes on that...'cause he lost $200K that same year.
 

mcurphy

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Feb 5, 2003
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From http://www.bankrate.com/finance/money-guides/reporting-gambling-winnings.aspx


TAX TIP No. 20

Lady Luck must be Uncle Sam's cousin, because taxes must be paid on all gambling winnings.



In this tax tip:
  • Winning amounts matter
  • When you have to report it
  • Track your gaming losses
Here's a look at the federal tax forms you'll need to share your good fortune with the Internal Revenue Service. And if you lost a few rounds before your numbers came up, there's a way you can turn those losses to your tax advantage.
Winning amounts matter
Requirements for reporting and withholding from a winning bet depend on the type of gambling, the amount won and the ratio of the winnings to the wager.
When you pocket $600 or more (and that amount is 300 times your bet) at a horse track, win $1,200 at a slot machine or bingo game, or take $1,500-plus in keno winnings, the payer must get your Social Security number and let the IRS know that you came into the extra income.
And while poker aficionados argue that the card game isn't gambling, but a game of skill, the IRS still wants details on how well you played Texas Hold 'Em. The IRS now requires all poker tournament sponsors to report competitors' winnings of more than $5,000.
The bottom line is if you are lucky enough to rake in a decent jackpot on a gambling transaction, you're going to have to give the IRS your tax information and, in many cases, you're not going to walk away with all the cash you won.
In addition to telling Uncle Sam that you were a winner and how much, the payer in these situations generally will reduce your payout by withholding federal taxes at the 25-percent rate. If you try to shortchange the IRS by refusing to furnish your Social Security number, the payer could take as much as 28 percent of your winnings right off the top to send to the tax collector.
In either instance, you'll get a Form W-2G showing the amount you won and, if applicable, how much in taxes you paid on it upfront.

When you have to report it

Even if you didn't win enough to trigger W-2G filing, you do want to be a diligent taxpayer and report those gambling winnings, right? The casino, track or lottery agent might not have reported that $25 you won, but it's still taxable income. It's ultimately the taxpayer's responsibility to tell Uncle Sam about his good fortune.
You report your winnings -- from the W-2G or those smaller jackpots -- on line 21, Other Income, of Form 1040. In addition to gambling proceeds, this is where you'd report any prizes or awards (cash or the cash value of merchandise) you won. All this money goes toward your total income amount.
However, you don't have to pay taxes on all your earnings, regardless of how you got them. You can reduce the amount of money the IRS will tax by reporting your losses as part of your overall itemized deductions. Check out line 28, Other Miscellaneous Deductions, on Schedule A. That's where you report any gambling losses. You can claim up to the total amount of winnings you entered on your 1040, effectively wiping out any taxable gambling income.
But make sure that this deduction, along with your other itemizations, is more than the standard amount. You always want to use the method that will provide you a bigger deduction.
Even though technically you might be able to avoid taxes on $3,000 you won by claiming $3,000 in bad bets, that's still less than the standard deduction of $5,450 allowed a single taxpayer on 2008 returns. If you have no other deductions to itemize, it doesn't make sense to forfeit the standard deduction's other $2,450 just because you can claim gambling losses.
If, however, your wagering losses are large enough to help boost your already substantial itemized deductions, then fill out the Schedule A.

Keep track of your gaming losses

When you do claim your gambling losses on your tax return, it's a good idea to keep a record of them. While you don't have to send your loss data in with your return, documentation could come in handy if the IRS ever questions the claim.
Acceptable gambling-loss record keeping could include a written log detailing the date of your wagers, the location, amount bet, type of gaming, and wins and losses. You should also hang on to losing lottery tickets or bingo cards.
The good thing about deducting gambling losses is that, unlike some other deductions, you don't have to meet a certain level before you can claim them. But then again, they aren't completely unlimited.
You can only count as much in losses as you won. So if you spent $100 on lottery tickets and won $75, you can only deduct $75. The other $25 is just part of the price of playing the game.
 
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hoyaguru

Senior member
Jun 9, 2003
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I believe in the US you will receive a 1099 on winnings over $600
I don't think it's that low, just last week I cashed out on a video poker machine for $1150. I put my ticket through one of the cash machines to get my money, but I think if it was as low as $600, they wouldn't allow you to use the cash machines to get your money, you'd have to go to the human cashier. I could be completely wrong here, but I think it's much higher.
 

mugs

Lifer
Apr 29, 2003
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How much can a person win in a casino without paying taxes?
They can win as much as they lost in the same year. Any more than that and you have to pay taxes. Not sure if you can carry over losses from previous years to cover future winnings like you can with capital gains.
 

FoBoT

No Lifer
Apr 30, 2001
63,089
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fobot.com
/facepalm

the amount of tax you pay would depend on your entire income picture, not just what you win from a casino

gambling winnings minus losses is part of your total annual income, how much tax you pay depends on all your deductions and credits etc etc
 

hoyaguru

Senior member
Jun 9, 2003
893
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/facepalm

the amount of tax you pay would depend on your entire income picture, not just what you win from a casino

gambling winnings minus losses is part of your total annual income, how much tax you pay depends on all your deductions and credits etc etc
Yes, but my question is how much would you have to cash out at the cashier for them to pull out the Form W-2G (thanks mcurphy) right there at the casino. Up to a certain amount, they hand you your money and you walk away, over a certain amount, they pull out the paperwork, fill it out, and you have to sign it before they'll hand you your winnings.

Next time I'm at the casino, I'll ask at the cashier cage, I was just wondering if anyone knew off the top of their head.
 

FoBoT

No Lifer
Apr 30, 2001
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that is withholding , not paying taxes

this is why the federal govt. can bankrupt us all, they have everyone brainwashed
 

Commish

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Jan 11, 2001
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A single winning is now taxed when you win over $1499, it was $1199 until recently.
 

Zebo

Elite Member
Jul 29, 2001
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Legally all winnings but in practice most people only report when casino asks for SS#
 

Drakkon

Diamond Member
Aug 14, 2001
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I don't think it's that low, just last week I cashed out on a video poker machine for $1150. I put my ticket through one of the cash machines to get my money, but I think if it was as low as $600, they wouldn't allow you to use the cash machines to get your money, you'd have to go to the human cashier. I could be completely wrong here, but I think it's much higher.
a W2-G is only triggered by a SINGLE bet not a series of bets. So because you sat at a machine or a few and racked up $1150 I'm guessing it wasn't a single bet on one machine on one hand that wont you over $600 at one clip. Theres also crazy rules about machines that use multiple betting lines or multiple hands at the same time. Now the casino may also factor in prior losses as well over the entire game if its a high limit machine, so that way every time a high roller hits something and wins over $600 on a single bet/line/hand they don't have to sign again and again.
 

PimpJuice

Platinum Member
Feb 14, 2005
2,051
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I have won 4K in one night before (my buddy won 6K sitting at the same table). We cashed out and received all $100 bills with no paperwork or anything regarding taxes.

I did not report the income......pretty much because I've lost way more then that :)
 

hoyaguru

Senior member
Jun 9, 2003
893
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A single winning is now taxed when you win over $1499, it was $1199 until recently.
I know it's been a long time since I started this thread, but I finally got an answer. I was at the Tropicana in Atlantic City a week or so ago, and hit a jackpot on one pull for $2000. A lady came over and turned off the bell on the machine, asked me some info, and said she would be back with my money. She brought back a form to fill out, which the casino will send to the IRS so I can pay taxes on my winnings. I asked her what the limit was, so a winner didn't have to fill out the form, and she told me it is $1200. She pointed out several machines where the top jackpot was $1199, she said that people like playing these machines, because if they hit the jackpot, they know they won't have to fill out the form. She also told me that this only counts on a single jackpot, in other words you could hit two smaller jackpots for $1000 each, totalling $2000, and you don't have to fill out the form.

Another thing she told me was, you can contact the casino at the end of the year, and if you use one of their cards in the machines you are playing, they track your winnings and losses, so they can send you your stats showing exactly how much you've put into the machines over the past year. If you've lost more than you've won, you don't have to pay taxes on your winnings. I think for most people, this would be the case.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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I know it's been a long time since I started this thread, but I finally got an answer. I was at the Tropicana in Atlantic City a week or so ago, and hit a jackpot on one pull for $2000. A lady came over and turned off the bell on the machine, asked me some info, and said she would be back with my money. She brought back a form to fill out, which the casino will send to the IRS so I can pay taxes on my winnings. I asked her what the limit was, so a winner didn't have to fill out the form, and she told me it is $1200. She pointed out several machines where the top jackpot was $1199, she said that people like playing these machines, because if they hit the jackpot, they know they won't have to fill out the form. She also told me that this only counts on a single jackpot, in other words you could hit two smaller jackpots for $1000 each, totalling $2000, and you don't have to fill out the form.

Another thing she told me was, you can contact the casino at the end of the year, and if you use one of their cards in the machines you are playing, they track your winnings and losses, so they can send you your stats showing exactly how much you've put into the machines over the past year. If you've lost more than you've won, you don't have to pay taxes on your winnings. I think for most people, this would be the case.
This only applies if you itemize on your taxes. Otherwise you pay tax on the "REPORTED" winnings even if you had any type of losses
 

ElFenix

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Where I'm from you don't pay tax on windfalls, because getting lucky shouldn't be a taxable activity.
because, you know, it's not like it's income that might be subject to a tax on income.
 
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