BLACKJACK AND TAXES:
More Strategies to Help You Keep
More of What You Win (Part 2)
By Basil Nestor
Basil Nestor is author of "The Smarter Bet Guide to Craps," "The Smarter Bet Guide to Blackjack," and other comprehensive gambling guides. Got a question? VisitSmarterBet.com and drop him a line.
Liam G. plays a lot of blackjack and video poker. Last year, video poker jackpots and wins in blackjack tournaments garnered him $25,000. Great. However, in spite of those wins, he had a net loss for the year of about $7,000.
To add insult to injury, in addition to being a net loser, Liam has a tax problem. When he won the jackpots and the tournaments, the casinos gave him IRS W-2G forms that documented those wins. The IRS received copies of those W-2Gs, so they think Liam earned $25,000 gambling last year, and they want their cut of the supposed profits.
In last month’s column in BJI, I mentioned that gambling losses could be deducted from your taxable income, but only up to the amount of your gambling profits. However, if Liam wants to deduct his gambling losses, he cannot simply subtract the loss from the profit and declare zero dollars won. No. The IRS requires that he declare the entire $25,000 profit, and then separately deduct the $25,000 in losses.
To do this, Liam needs records. Moreover, you need records, too, if you want to deduct gambling losses.
Escaping the Tax Man
Your quest for records should begin with...
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