IRS Gives the Shaft to Table Games Jackpot Winners!

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A big gambling win or jackpot can really hit you within the funny bone, especially with regards to taxes. For those who didn't know it, the IRS demands that you simply claim any gambling winnings as income. Unfortunately, you cannot just deduct your loses out of your wins and claim your new amount. Instead, you claim the winnings on-line 21, form 1040, after which to assert loses as much as (but not exceeding, bummer) your win, you're taking a deduction for the quantity you lost in "gambling losses," on schedule "A." Is that a problem? Yes!

The problem is you'll want to itemize your deductions to assert the losses! And, it's important to keep good records of your wins and loses! In the event that they aren't correct, otherwise you do not know if you happen to won or lost, you'll want to lose thousands of greenbacks. In fact your problems could also be alleviated or exacerbated in case you hit a jackpot and feature taxes withheld at the spot!

The Shaft

And here's where the IRS gives the shaft to table game players who enjoy blackjack, Pai Gow, or even Let-it-Ride. Should you play the bonus bet on any table game and hit a jackpot with a payoff of $5,000 or more, the casino is needed to automatically withhold 25% of your payoff! In step with the IRS, the casino must "Withhold on the 25% rate if the winnings minus the wager are greater than $5,000 and are from: Sweepstakes, Wagering pools, Lotteries, or other wagering transactions, including transactions involving horse races, dog races, or jai alai, if the winnings are no less than 300 times the quantity wagered. Don't withhold on the 25% rate on winnings from bingo, keno, or slot machines. Also, don't withhold on winnings from another wagering transaction if the winnings are $5,000 or less."

What that every one means is if you hit a $10,000 jackpot on a slot machine, or at Keno or Bingo, you receives a commission the entire amount. In case you play Pai Gow and hit a progressive jackpot for $10,000 then the casino withholds $2,500 and pays you $7,500. Then, it's important to itemize deductions to get that quantity back! So, maybe that's good, because you won't be scrambling to return up with the cash to pay your taxes on April 15, or even it's bad, since you can't itemize to get that cash back is you might be actually a net loser for the year!

Let's say you do win that $10,000 and feature $2,500 withheld, and also you are single and not using a other deductions, but you'll be able to prove you will have a net loss for the year, even after that $10,000 win - and you'll do it with correct records and a duplicate of your wins and loses from the player's club desk, then what? The IRS says, tough, because to itemize, your deductions must be substantial enough to exceed what your standard deduction amount is. Hmmmm. I AM NOT a tax expert, however it seems you simply get the shaft here! Anyone have an answer for the poor jackpot winner who finally hit it big, but can't itemize, or who would have a better deduction without itemizing?

Read More... [Source: About.com Casino Gambling]