Comments on: Gamblers Ask About New Tax Law

By: Albert Trotter

Albert Trotter — Tue, 26 Dec 2017 13:24:21 +0000

Depending upon the amount of your winnings and the type of gambling, the establishment or payer may be required to withhold income taxes. In general, 25% of the amount is required to be withheld. In some cases, a “backup” withholding of 28% is required instead.
If tax is withheld from your gambling winnings, you will be sent a Form W2-G from the payer.

By: Dennis Eudaley

Dennis Eudaley — Sat, 23 Dec 2017 15:56:50 +0000

I think a LVA survey question on “how the new tax law will affect your future gambling” should be a high priority. I think the comments that follow will be “eye-opening”

By: Kevin Lewis

Kevin Lewis — Sat, 23 Dec 2017 06:29:58 +0000

The crusher is that it will make far less sense to itemize deductions, as you would only logically want to do that if your itemized deductions were larger than the standard deduction. With a doubling of the standard deduction, it will be pointless to claim all but the largest gambling losses as itemized deductions.

The math is that if you would have benefited from itemizing before (because you could have claimed gambling losses to offset gambling income), now, ALL your gambling income will be taxable (as reported on W2-Gs) but NONE of your losses will be deductible! So win $10,000, then lose $10,000, and you pay taxes on $10,000 of phantom income! You do benefit from the larger standard deduction to some extent, but if your gambling losses are greater than 1/2 of your new standard deduction, you are worse off than you would otherwise have been.