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Gambling Tax

It doesn’t matter where people get their money from because the Internal Revenue Service isn’t interested. All they care about is whether it’s declared or not. But the question people ask themselves is if online casinos don’t declare their winnings why should the gambler? Land-based casinos declare the major winnings of players, and even in the case of non-residents their money is taxed before they even receive it. At the highest tax rate of 50% where’s the motivation to declare any earnings?
 
A massive 50% of tax is placed on all gambling winnings, but it’s still important to declare any winnings. The main reason is auditing. The IRS is stringent with their auditing. If someone nets themself a big win from a game of Keno or Blackjack the IRS wants to know where the money came from; whether it was offset with any losses or not. To put it simply, follow the laws of the land and don’t mess around with the IRS. Failure to declare can mean heavy fines, and even prison time.
 
High rollers on US tax returns declare their winnings as ‘other income’. Don’t worry about declaring everything, all the IRS want is the net gain on the wager. For example, if somebody places a wager of $100 to win $2000 they should only declare $1900. The same thing doesn’t apply to any losses, though. Even if the money was lost later it doesn’t matter because it still needs declaring.
 
To find out about the exact limits for each game in the US, look at www.irs.gov. Players must declare:
 

  • Any Keno winnings above $1500
  • Any slots/bingo winnings above $1200
  • Any winnings from other casino games above $600

 
Losses aren’t tracked against wins, so track any losses independently. These gambling losses are known as itemised deductions and the section entitled ‘other miscellaneous deductions’ is where to declare them. But any deductions from gambling losses only count towards the amount the player has won. If a player wins $1000 they can’t deduct anymore than $1000 in gambling losses, even if they lost more than this.
 
Use tickets, statements, and casino bank transactions to prove both winnings and losses. The IRS recommends keeping a diary of each win and loss with all necessary information, such as the type of wager and where the wager was made. Also, keep a track of the withdrawal method used to claim the winnings.
 
The Internal Revenue Service is not something to mess around with. Avoid trouble by keeping organised and regular gambling records at all times.
 







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