Some of you gamblers who have filed your taxes have already noticed it – and many of you procrastinators will find it out when you feverishly work on your returns this weekend. What is it?

It’s that ugly subject I call the “Gambler AGI Trap.”  

Many gamblers may be looking forward to receiving the economic stimulus payment the government is giving us this year. Perhaps you plan to use it to finance a casino vacation and/or to increase your gambling bankroll.

Information about this government “bonus” from the IRS Web site:   “In most cases, payments will range from $300 to $600 for individuals and $600 to $1200 for joint filers. Taxpayers may receive $300 for each qualifying child. Payments could be less, depending on tax liability and Adjusted Gross Income. Phase-out reduction begins at $75,000 for single filers and $150,000 for joint filers.” (Bold and underlining added) 

In the new expanded edition of Tax Help for Gamblers Marissa and I list 21 possible negative effects of the AGI Trap, the requirement that you must put your gross gambling win number as income rather than using a net win figure. Here now comes #22: You may not get the max amount of the economic stimulus payment because your AGI (adjusted gross income) is too high, and the ironic thing is that it may be too high only because of your gross gambling wins. Your actual net win at the end of the year, after deducting your losses, would be much lower; in fact for most gamblers, they actually suffered a net loss. But you may still have to endure the punishment of a reduction in your bonus. 

If you have questions about how your gambling can affect your AGI or other tax questions which puzzle taxpayers, I have an announcement that will help you get answers much more quickly than before. (This is great for you procrastinators who may be scratching your heads this weekend!)  Tax Help for Gamblers is now available as an e-book. You can go to the LVA Store and download it and start getting tax information you need in mere minutes! And the price is downright rock-bottom frugal – only $9.98. 

While you are at the e-book page, you will see there are 3 other e-books besides the tax one. This is the wave of the future – so look for more titles from Huntington Press in the future.

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Today I am making a list of all the casinos where Brad and I played in 2007 and determining how I can get the win/loss statements for each one. Although there are player disadvantages in the consolidation of many casinos under one large umbrella company, this trend is a definite advantage at tax time. Requesting one win/loss statement from “mother” Harrah’s or MGM Mirage or Station will save you from contacting their umpteen “baby” casinos, since play at all of them will appear on the master statement. 

Another trend that is handy at tax time is that many casinos now handle the win/loss statements on their Web site. Harrah’s is easy: Sign in with your password and allow popups, and your Gaming History Statement will appear and you can print it out right then. MGM Mirage lets you make the request online and they will then send the win/loss statement to you by snail mail.

If you can’t do the whole operation online, at many casino Web sites you can at least download the request form, then submit it by fax/snail mail or in person at the players' club desk. Read carefully the rules for each casino’s procedures. For example, if you don’t appear in person at a Station casino, you must have the request notarized. 

A warning I gave in the book Tax Help for Gamblers: “Some people feel they can skip having a diary if they get win/loss statements from the casino at the end of the year. These are valuable as supporting evidence of play, but many tax-court decisions have upheld the IRS position that they don’t substitute for a gambling log.” 

Most knowledgeable tax preparers advise against sending in detailed gaming diaries with tax returns. Instead, a summary sheet can be attached if the taxpayer needs to include more details than there is room to put on the actual return. There is always the danger of giving the IRS too much information, and detailed records are best saved in case of an audit. 

However, Marissa takes one whole section in the book to discuss the danger of sharing win/loss statements that include detailed coin-in and coin-out information with the IRS at any time, even in an audit. They can be interpreted in a very negative way for the gambling taxpayer, especially by tax personnel who are not familiar with gaming circumstances. 

Joke of the Day - from the Internet: "As income tax time approaches, did you ever notice that when you put the two words 'The' and 'IRS' together, it spells 'THEIRS'?"

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