It’s that time again – I am getting a lot of private e-mails with questions about how to handle gambling income on tax returns , particularly from recreational gamblers who are getting W-2Gs for the first time.
I would like to answer each one of these e-mails, but my days just aren’t long enough. Usually an answer would not be a simple single sentence, but many long paragraphs. Tax issues for gamblers are so complex and there is not one short answer that fits every person’s cirumstances. That is why the book Tax Help for Gamblers was written.
I wrote this book, with the help of Marissa Chien, who is a tax preparation professional and a gambler herself, to gather as much information as we could find to help a gambler make the wisest tax decisions. We discuss the options for filing as a recreational gambler or a professional one, no matter what game you play, and whether you play online or in bricks-and-mortar casinos. There is a whole chapter with specific help for the poker player.
Included is a chapter on state tax issues and an invaluable chapter on “How All 50 States Handle Gambling Wins/Losses.” The extensive Appendix has samples of casino-issued forms, some basic IRS information, and sample tax forms that show how various kinds of gamblers might fill them out.
You can order Tax Help for Gamblers here at the LVA Web site, as a hard copy or as an e-Book, which has just been updated.
IRS handling of gambling “win” is patently unfair. To have the “win” included in the AGI, and the deduction for losses be on Schedule A hurts AGI based calculations as well as really hurting those that do not file Schedule A. Jen and I have kept meticulous records since 1998 and we have been unfairly taxed on a non existant win on more than one occasion. I get angry EVERY year when claiming my “wins”. I am not opposed to paying my fair share of taxes, but I want it to be just that – fair. Of course we could discuss that all the money you wagered with has already been taxed and the IRS wins on every wager made whether the player wins or not. When I “win” I owe tax. When I “lose” the casino owes tax. What a great set up for the taxing agency.