DrStrange
4 of a Kind
Best I can tell. the tax reform act has changed the effective calculation for how we report and pay taxes on gambling income.
Here is my understanding:
1. Any money won gambling is reported as misc income on the front page of your tax return. Please note this is not your NET income, it is the totals of all the winning sessions for the year. Even someone who lost money for the year is required to report their gross "income" without considering their losses.
2. It is not clear that any gambling losses can be claimed as an itemized deduction in 2018, but for the moment let's say you can claim them. The problem is you have to lose enough to overcome the standard $24,000 deduction - which most of us are not going to do. And even if you do have big enough losses to claim, you still lose the first $24,000 (less any other deductions.)
3. US Tax payers are required to report income per session played. For poker players that would be each time you sit at a table, it is a reportable session. Similarly for black jack / craps / table games, each time you play at a table that is a session. There is debate about how the sessions rules work for slot players and sports betting, but safe to say a session is shorter than your whole trip. Perhaps at best a single day.
Bottom line, you can not net your winnings against your losses and report a single number. The literal letter of the law says that people who have a net loss, still must report their "income" and then see if the tax code allows the loss. While that is the law as written, I don't know of a single example of a Vegas loser getting hit with income taxes on the money he/she didn't win.
note this could be a serious issue for profitable poker players. Not being able to deduct losing sessions from winning sessions could wipe out the winnings or more.
I explored 2+2 on this question and came away unsatisfied. The discussion revolved around professional gamblers and how their schedule C income should be reported and the advantages of forming a corporation to house a gambler's income. See it here:
https://forumserver.twoplustwo.com/...trump-tax-proposals-us-professionals-1664526/
Personally, I thing a netting approach seems best - just report the net income as a single number on the front page as misc. income. But I thought it might be worthy of a larger discussion.
Lastly, note this does not have as great an effect on 2017 taxes though some people who don't itemize might already face this problem.
DrStrange
Here is my understanding:
1. Any money won gambling is reported as misc income on the front page of your tax return. Please note this is not your NET income, it is the totals of all the winning sessions for the year. Even someone who lost money for the year is required to report their gross "income" without considering their losses.
2. It is not clear that any gambling losses can be claimed as an itemized deduction in 2018, but for the moment let's say you can claim them. The problem is you have to lose enough to overcome the standard $24,000 deduction - which most of us are not going to do. And even if you do have big enough losses to claim, you still lose the first $24,000 (less any other deductions.)
3. US Tax payers are required to report income per session played. For poker players that would be each time you sit at a table, it is a reportable session. Similarly for black jack / craps / table games, each time you play at a table that is a session. There is debate about how the sessions rules work for slot players and sports betting, but safe to say a session is shorter than your whole trip. Perhaps at best a single day.
Bottom line, you can not net your winnings against your losses and report a single number. The literal letter of the law says that people who have a net loss, still must report their "income" and then see if the tax code allows the loss. While that is the law as written, I don't know of a single example of a Vegas loser getting hit with income taxes on the money he/she didn't win.
note this could be a serious issue for profitable poker players. Not being able to deduct losing sessions from winning sessions could wipe out the winnings or more.
I explored 2+2 on this question and came away unsatisfied. The discussion revolved around professional gamblers and how their schedule C income should be reported and the advantages of forming a corporation to house a gambler's income. See it here:
https://forumserver.twoplustwo.com/...trump-tax-proposals-us-professionals-1664526/
Personally, I thing a netting approach seems best - just report the net income as a single number on the front page as misc. income. But I thought it might be worthy of a larger discussion.
Lastly, note this does not have as great an effect on 2017 taxes though some people who don't itemize might already face this problem.
DrStrange
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