Irs Gambling Sessions
- Gambling losses were allowed, but in an amount less than claimed by the taxpayer. In justifying its findings, the court stated, “We are convinced, on the whole, that petitionerwas a truthful and candid witness.” In Doffin, 43 the court estimated and allowed IRS-rejected gambling losses. The court looked at the taxpayer’s lifestyle.
- But now, because of tax reform, tax law has you between a rock and a hard place for tax years 2018 through 2025. The recent tax reform gives you one choice only for those years. Q&A: Find Some Tax Sanity by Using the Gambling Per Session Rule. Tax law does not like you if you are a casual gambler.
- The sessions method is not an IRS approved method of reporting gambling wins. If you report the winnings as you are stating, then you should attach an explination of how you arrived at net income. My warning is that your explanation and reporting does not and generally supported by statue, have to be accepted by the IRS.
The IRS requires you to report all of your gambling winnings for the year as Other Income on page 1 of your Form 1040,U.S. Individual Income Tax Return. You may deduct your gambling losses for the year as Other Miscellaneous Deductions on your Schedule A.
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Here’s a resource guide that gives you the Tax Cuts and Jobs Act tax reform articles published at the Bradford Tax Institute from January 1 through July 31, 2018, including for each article the (a) topic, (b) code section, (c) prior law, (d) new law, and (e) link.
If you’re a professional gambler, tax law did you no tax favors before tax reform. But now, because of tax reform, tax law has you between a rock and a hard place for tax years 2018 through 2025. The recent tax reform gives you one choice only for those years.
Tax law does not like you if you are a casual gambler. If you are a casual gambler, you report your winnings above the line, where those winnings can increase your taxes, cause loss of deductions because of phaseouts, and increase your Medicare premiums. Your losses are itemized deductions that appear below the line, where you benefit only if you itemize. There’s no choice about where you report your winnings and losses, but there’s a way you can use the per-session rule to mitigate the damage this reporting causes.
If you win big at the casino, the government is going to ask for its share of the proceeds. Gambling income is taxable, and casinos must, by law, report big wins to the IRS. But the law provides you a way to offset your gambling income and thereby reduce your taxes. You just have to know the rules, including whether you are a professional or amateur gambler, and keep the right records.
Irs Gambling Session Rules
Are you a recreational gambler? If so, you likely know that you are required to keep income tax records that prove your gambling winnings and losses. If you don’t have the records, your winnings are taxable and your losses nondeductible. Holy smokes! That’s terrible. Don’t let that happen. See why you need the records. Learn what the IRS and the courts say your records must show. Spend a little time with this article so that you can avoid overpaying your taxes on your gambling activity.
Hallelujah, gamblers in the business of gambling may now deduct business expenses in excess of gambling losses. The Tax Court, in a new, precedent-setting case, establishes new rules for gamblers in the business of gambling.
Anti-alienation provisions prevent ordinary creditors from levying pension payments. The IRS does not suffer these provisions.
Gambling requires good strategies not only in your gambling activity, but also for tax purposes. You need to report your gambling income and losses in your tax returns and keep tax records whether you win or lose, whether the gambling is legal or illegal, and whether the gambling is a tax defined business or hobby.
Hobby gambling can trigger taxes when you have a zero income because the law makes your winnings reportable above-the-line and losses deductible below-the-line.
When you win more than $1,200 at the slots, the casino must report your winnings to the IRS. In this court case, the taxpayers mistakenly reported gambling income of $21,100 and the IRS received 1099s showing income of $44,464. This difference in reported income did not look good in court. But these taxpayers fared far better in court than anyone in their right mind could expect because they had proof that this court liked.
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and it helped somewhat. Here is my scenario...
I do 'work part time', and as far as taxes go for that, I have a solid understanding. What is new is the w2g and logging my gambling wins/losses... I play poker 'semi-professionally' and am amping my play up much more this year (including travel to LV, AC, etc...) I log every session within an app on my iphone called Poker Journal.
It logs the following: start date, start time, end date, end time, break time, play time, game (stake, limit type, & game), location (casino), bankroll, initial buy-in, rebuy count, rebuy total, tokes(given to dealer(s)), tips (for cocktails, drinks, food, etc), cashed out amount, net profit, gross profit, net hourly rate, and even players.
So this is the software I use to log my play, it is pretty solid and has basically everything I need. I even thought I can possibly add a custom field and put the dealer that is in the box when I sit down (possibly with their gaming badge number) and the dealer that is there when I leave, and/or the cashier that cashes me out.
I think I have everything that IRS requires for a gambling log. (According to page 12 of IRS publication 529)
When I play poker tournamets, I get a buy-in receipt and when I lose I have that for my records, and when I win, they also give a recepit of winnings. So for tournaments I am not too worried. The poker room supervisor will usually sign and another casino employee will also sign and both verify the payouts along with their gaming badge numbers. I think that is enough for providing a 'witness' sort of speak, if I dont have the payout recepit of winning, I have the buy-in receipt to report that tournament a loss.
What my question is how this 'honor system' works for 'table games' as when I play poker at a live cash game, this is considered a table game and no one really keeps track of wins/losses other than the player (if they choose to). This app I uses has an export function so I can convert everything to Excel and/or other like programs. So is this information I log suffeciant enough? How would anyone know if I just made up my own wins/losses? I just want to make sure that its legit enough that when I file in 2014 that the IRS will accept my logs and we can be square. I obviously don't want anything to back fire on me as I do belive I play enough poker that I don't want to end up being audited or have someone come after me for tax evision.
Any input would help and is appreicated. TIA!
http://portableapps.com/apps/office/rednotebook_portable
Then, develop a 'diary template' that you can use to track each of your gaming sessions. In addition to the required accounting information, I also record gaming conditions, notes, etc. This way, I am encouraged to use the program for more than just keeping track of wins/losses.
GH, do you play poker or just use the red notebook for other gaming expense? I only ask because I don't do any other gambling other than poker. So I recommend poker journal for the poker player. Otherwise I would probably use another notebook type app for logging my activity. Thanks for your input!
Also, does anyone else know if I can ask the casino for a CTR or are they only necessary when the casino issues them?
I use Red Notebook, because it lets be keep track of everything I can imagine. All I do is create templates for:
* BJ sessions.
* VP sessions.
* No play 'exploratory' expeditions to casinos.
* General 'junk' you'd find in any AP notebook/diary.
Technically, You could deduct the $15 as a tax preparation expense ;)
CTR are filed by casinos with the IRS. If you check to website of most casinos, they have online win/loss statement requests. These are useful to ensure that your log is consistent with anything they reported via CTR. And remember, CTR are only required for certain dollar transaction levels.
I play some vp, and my log only includes date, place, any w2g's received, and amount won or lost at the casino regardless if or how many tax slips I've collected. I do not, however, in any year ever claim I've won more than I've lost, even though there have been some years that I've actually won. I've been audited once and they accepted my doctored up log. Easy peasy.
I've been told on numerous occasions that W2G's for table games are issues on wins of 300-1 or more AND the win pays more than $5000.
Irs Gambling Sessions
I regularly cash more than $5k in chips and have never been asked who the hell I am, LOL. Just because I cash chips at the cashier, doesn't mean I won anything.Irs Gambling Sessions
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