Giving a substantial tip to a dealer after a big win

If someone hits a jackpot on a table game like Ultimate Texas Hold ‘em and wants to give a substantial tip to the dealer, is there a way to tip and to have at least a record of the tip amount for a tax deduction? If someone hits a jackpot for $100,000 and wants to tip the dealers $3,000 or $4,000, can it be done in such a way so that the tip is recorded and possibly be used to reduce the taxes that are owed? For example, if 20% is deducted immediately for income taxes, the net would be $80,000 due to the winner. Could the winner ask for a check for $77,000 and that the remainder, $3,000, be given either in check or cash to the dealers and have a record of the amount of the tip? A second question would be, can tips be deducted from gambling winnings? I've never had this issue come up, but one can hope …

First things first. The casino will issue paperwork to the jackpot winner for the exact amount of the jackpot. This is strictly according to IRS rules; the casino can't, and therefore won't, subtract any tip from the winnings. Casinos follow the rules. They aren't concerned in the least the winner's tax liability.

Secondly, for recreational gamblers, tips don't reduce their tax obligation anyway. They have to report the full amount of their winnings and no deduction is allowed for tips. (A professional gambler might be able to deduct tips as a gambling-related expense, depending on his or her particular situation.)

Will the casino issue amended tax paperwork to someone who wants to give a substantial tip to a dealer after a big win at the tables?

No part of this answer may be reproduced or utilized in any form or by any means, electronic or mechanical, without the written permission of the publisher.

Have a question that hasn't been answered? Email us with your suggestion.

Missed a Question of the Day?

Have a Question?

Tomorrow's Question

Has Clark County ever considered legalizing prostitution?

Comments

Jackie Jan-14-2020

It may be posible

People who receive tips but must share their tips with others may deduct those tip amounts in filing income tax.  Check with your tax advisor if any tips you make are also tax deductible.  Only problem is, the situation under which the tip was made has to be business, such as professional gambling is a business or you are on a business trip.  Of course you could ask the dealer you are tipping what their religion is or favorite charity and say you are not tipping them but making a contribution which is tax deductible.  An audit may question the integrity of such a claim.

David Jan-14-2020

If you drive a car ...

... I'll tax the street. If you try to sit I'll tax your seat.

Derbycity123 Jan-14-2020

The Sponge

Had a coworker years ago that was upset that he could not deduct the car and $10,000 that he gave to his girlfriend. We called her 'The Sponge' and we called him Idiot.

jay Jan-14-2020

Come to Canada

While US residents and GreenCard holders are legally obligated to report all income based on US rules. In Canada we do not tax lottery or casino winnings, nor is any paper work issued. In Alberta and Saskatchewan drinking and gambling is legal at 18, in all other provinces its 19. 

Blackjack rules are decent, $5 & $10 min are the norm.  Typically continuous-shufflers are used on the $5 tables and the auto-shufflers are used on the $10 with a 6 deck shoe. Split aces up to 4 times, Split any other pairs up to 8 times, double after split. Surrender available except against an Ace. All tables are 3-2. 

The only thing funky is that the dealer does not pull his down card until after the hand has been played so there is no dealer peek but insurance is offered. The rule that is in the players favor is that If you double or split against an ACE the dealer only takes 1/2 your bet (and not the full double). So you might have two 10's and choose to split them.

O2bnVegas Jan-14-2020

lucky winner

We should all have such a thing to worry about.  My tax guy would say "call me and I'll figure up how much you should ask to be taken out right then."  Not that it has ever happened to me, but I did ask him!

To Jackie's point about donating to a charity, even if the winner followed through donating to a dealer's favorite charity "in the dealer's name", the winner/donor gets the deduction, not the dealer.  Doesn't affect what the casino does.

The winner can (later) contact his church or charity to set up one of those trusts or whatever.  His donation from the winnings is invested and grows over time for the charity.  The winner gets a tax benefit depending on how the thing is constructed.  I've read about these things, can't recall specifics, but it can be more beneficial than just a one time individual donation to a charity for tax purposes in the year the money was won.  

Winner should call his tax person.

Kevin Lewis Jan-14-2020

On the other hand...

The more germane question is, you lose $100,000 at the tables during a bad weekend, and the casino, taking pity on you, gives you back $10,000. Is THAT taxable??

Roger Sulkowski Jan-14-2020

Pittsburgh Roger

Why in the world would you tip the dealer $4,000 grand on a 100 k hit. LVA sez: The proper tip is 4 tens of a percent which would be $400 dollars. Unless you want to be a hotshot and show off for the rest of the table!!!

O2bnVegas Jan-14-2020

To Kevin's question

I doubt that 100K is considered a substantial loss by the casinos.  On the Strip, at least.  Some really high rollers do get show up money, the casinos being pretty sure they will lose that and more.  Doubtful that is on record for being taxed.  And what high roller would come in just for a pitiful little 10 grand?  LOL  Heck, some bet that on one hand at the tables!

Kevin Lewis Jan-14-2020

Maybe so, but...

If they DID give a high roller some cash goody, either pre- or post-loss, wouldn't that be a taxable transaction, especially if is was $10K or more?

Question of the Day - 14 January 2020

Comments