Question of the Day - 01 July 2020

It is all about the money.

If the reporting amount of $1200 is raised to $5000 or some other higher number that would mean the government would be depending on the honesty of people to voluntarily report even more winnings and pay tax on it. They know that wouldn't always get done. Many people don't report the winnings they get now that are less than $1200 and they get away with it, the IRS doesn't have the manpower to run down everything so they concentrate on the big tax offenders. In their view raising the reporting threshold to $5000 would just give people the ability to pay less in taxes due. I'm for paying less tax but I understand the IRS view, as a tax collector they don't see this as a good idea. So it will take Congress action to raise the reporting threshold.

I agree that Congress will have to get in the mix.  But I am willing to bet, that if they raise the reporting threshold to a higher amount, I bet the amount reported will not change.  

I agree that the threshold should be raised and tied to inflation. 

More importantly, though, gamblers should be allowed to offset all gambling winnings with gambling losses in the same year. With the standard deduction now set much higher, most average players are fully taxed on W-2Gs, even though they almost certainly lost more than they won.

Meanwhile, wealthy high rollers have a much better chance of offsetting wins and paying less tax. Once again, the corrupt Trump administration and Republicans in Congress have cheated the middle class and rewarded their wealthy cronies.

rokgpsman who cares?? If you want to report every $500 win be my guest.

Let me add that your win/loss statement from a casino should be good enough to show your gambling winnings or losses.  It provides third party documentation of your win/loss.  Let the IRS go after the casino and pit bosses to make it more accurate for table games.  These little notebook diaries suck the fun out of gambling some days.

I guess I don't understand the complaints on this one.  You have to report all your gaming income whether you get a W2G or not.  I guess the only possible issue is delays when waiting for the form to be delivered.  I can see this could be an issue for high rollers who hit payoffs of this size a lot (e.g., on a $25 JOB machine every 4 of a kind or better would require a W2G, so I can see that would get boring fast).  But given the general level of cheapness of LVA readers, I suspect that isn't a problem for most of us!

The IRS is already taxing the vast majority of gambling winnings when they tax the casinos.

How is that?  The winnings given to gamblers would be deducted from the revenue. They're not taxed at the casino level. That's why IRS wants you to report ALL winnings, not just W-2G reported winnings.

Does anyone have a figure, how much total revenue the Fed currently sees yearly from taxed gambling winnings in the US?  

Keeping it simple, not trying to estimate unreported winnings, illegal shenanigans, etc.  

How much was taken in, say, last year?  

And to which "pot" in the Federal budget are those dollars allocated?

A recent poll asked whether readers preferred the good old Mob days of Vegas or today's corporate dominance. In relating to today's question, I should observe that in the good old days, when you hit a big jackpot, you didn't have to fill out some silly form. They just took you out back and beat you senseless. That was the only tax you paid.

The government doesn't have a revenue problem - it has a spending problem.

You say "But given the general level of cheapness of LVA readers"..   I really prefer the word THRIFTINESS, my friend :)  Ron, also in NC

What an absolute palavar - what is the point of making tens or even hundreds of millions of players (who are mostly losing money anyway) fill out tax forms when you could just tax the biggest winner on their profits? Here in the civilised world it works just fine and takes out so much admin

Isn’t it also a proper PITA for the high stakes slots players who are effectively getting a hand pay & IRS form on virtually any win - where is the fun in that? 

But would the cashiers moan if the limit for handpays was increased as it would see a noticeable decline in their tips?

Land of the free my aaargh I’ve run out of space

As a player, I would love to raise the limit. As a Slot Attendant, I would like to keep it as is. The casinos possibly would like to keep it that way as well, since they might have to pay Slots employees more to offset the loss of tips. Cage cashiers would love to raise the limit, more tickets to cash because of less hand pays.

He should be the first to want to raise it to $5000.00, Trump was in the casino business, and he knows 99.99% of us end up losers in the end. I can understand how the rest of politicians have their head up their ass!

Because the vast majority of winning is done by the casinos.

Brent...really? This is Trumps fault also?
LMAO

Reeko, Absolutely. The Trump tax act (I won't call it a "tax cut," since most people didn't get a cut at all) in 2017, passed by the Republican congress, made is a practical impossibility for most players to deduct losses, but they still must report wins.

So If i bet $1,300 a year and win one $1,200 jackpot, I have "won" $1,200 for tax purposes and must pay taxes on $1,200. But if I bet through $130,000 a year and win 10 $12,000 jackpots, I can offset all my winnings with my losses and pay no taxes on winnings.

So yeah. Trump's and the Republican's fault.

What rokgpsman you can only express yourself using profanity! Some peoples kids. Also your not man enough to post your reply here in public. WOW I'm offended.

That's one penny over the payoff for a royal flush at $1 denom. The overwhelming majority of jackpots are on video poker for amounts less than these.