Tax Time Revisited – and a Book Update

I knew when I wrote my last blog that there might be questions and requests for more details.  Actually, looking over it later, I was surprised it made sense at all.  I wrote it in the middle of the worst flu attack I had ever suffered – an unusually potent flu strain that they say this year’s flu shot didn’t cover well.   Now a week later, the main symptoms have died down, but I still feel like I was run over by a truck.  However, I know it takes a long time to regain one’s strength, but I want to try to cover some of your comments and questions while I am recuperating.

First, I must emphasize that Brad and I  do not keep elaborate spreadsheet gambling records.  When I first got a computer, I tried one year to keep digital records.  I would jot down all pertinent information in a small notebook at the end of each session before we left the casino.  And then when I got home, I would transfer the information to a simple spreadsheet.  However, I never really learned to use Excel so I found this was too time-consuming.  And besides I liked my Old School hard-copy records.  I guess if I had known we were going to be doing this for the next 35 years, I would have taken some Excel lessons.  But instead we have a 35-year hodge-podge of stacked paperwork that would make no sense to anyone else but me!

So, although my paperwork is full of individual details of our session plays, there is no cumulative figuring of play EVs or analysis of where we had won – or lost – more.  As I have written many times, I am not a math person.  A pretty spreadsheet or deep-dive math analysis brings me no particular pleasure.  I am more a big-picture person.  I do the needed math when we are choosing a play, taking the EV of the game and adding players club and promotional benefits.  Comparing the total EV of all possible plays, we decide on the one that will fit our schedule and be the highest positive-expectation choice.  That has been the basic way we have chosen VP plays for the last 30 years.  We don’t know where we have been luckier or where we have had bigger losses.  These facts aren’t important to us. We don’t have to achieve the expected EV in each casino.  It’s all in choosing the best EV in the first place that is the reason for our good total bottom line down through the years.

Of course, this choice of plays has changed over the years.  Used to be the game itself had a positive expectation and all those “extras” I called the “gravy.”  That has slowly changed with the downgrading of good paytables and now we have to really scramble for more “extras” just to push a play into positive territory.

Some of you asked how we handle certain items on our taxes.  The figures I gave in the last blog are just part of raw data and wouldn’t necessarily appear exactly like that on our tax return.  But I will say that when I write about us “winning” or “losing,” I am talking about actual financial results at the end of the year.  Our profit or loss is the actual cash results of our play.  This can include players club money benefits, tournament prizes,  promotional wins, and what we call cash-equivalent benefits, such as gift cards.  We have never counted comps as “wins” although in the last couple of years we occasionally have taken them into consideration when choosing a marginal play.

I can’t give you specific advice on how you should handle gambling-connected items on your return.  But I can suggest a resource that can help you and your tax preparer in making some of these gray-area decisions, the book Tax Help for Gamblers.  And I am happy to tell you that the 4^th edition of this book has been completely updated and expanded to cover all the new tax laws that impact your 2018 return.  Those new tax laws have made things very difficult for many gamblers, and I was glad to find a new expert, Russell Fox, who would help add the technical information that needed to be discussed.

I wanted this book to be out earlier, but the government was very slow in rolling out information and forms.  But we finally got all the 2018 forms to add to the book and it is now at the printers and will hopefully be back by the end of February or early March, with plenty of time for you to make the April 15^th deadline. (There will be an eBook version too but it will not come out until later.)

And talk about a frugal sale – Huntington Press is offering the book (retail at $24.95) at a pre-pub price of $15 through March 15 and that includes shipping to US addresses only.  Order this new 4^th edition here.