How to report gambling winnings in 2018?

[SG4]

If you've won money gambling this year, but have no W2G's, how should this be filed on income taxes? Still under gambling winnings, or somewhere else?

[AstrosFan]

Originally Posted by SG4

If you've won money gambling this year, but have no W2G's, how should this be filed on income taxes? Still under gambling winnings, or somewhere else?

https://www.irs.gov/pub/irs-pdf/p4706.pdf

Don't forget the tax bracket changes with the more money you make

https://www.irs.com/articles/2018-fe...ard-deductions

[AndyC]

Originally Posted by SG4

If you've won money gambling this year, but have no W2G's, how should this be filed on income taxes? Still under gambling winnings, or somewhere else?

There never really was a line on the tax return used exclusively for gambling winnings. It was reported under other income. The same is true for 2018 except the forms have been changed somewhat. What used to be on page 1 of the returns is now on either page 2 or Schedule 1. Gambling income will be reportable on Schedule 1 under other income.

[SG4]

Thanks for the replies

[Cuffdaddy]

The W2G is all that is reportable then matched by losses on the tax return. With the new laws making W2G's very few and far between why would you need to report anything unless you were lucky enough to have one.
With TVG they do supply a year end report that I would use to show losses , not sure if the IRS has access to those as the norm.

[AndyC]

Originally Posted by Cuffdaddy

The W2G is all that is reportable then matched by losses on the tax return. With the new laws making W2G's very few and far between why would you need to report anything unless you were lucky enough to have one.
With TVG they do supply a year end report that I would use to show losses , not sure if the IRS has access to those as the norm.

Pursuant to IRC section 61 all gambling income is reportable. What generally gets reported is just the W2-G amounts. Given the difficulty of an IRS agent proving gambling winnings of a horse player it is highly improbable that such an investigation would occur unless they are chasing criminal activity

[Fred Mertz]

When I started betting on horses I kept all my loser tickets.


I gave them to my tax lady and she basically said that I couldn't claim my losses unless I had some decent winnings.


That's what I remember.

[Cuffdaddy]

Originally Posted by AndyC

Pursuant to IRC section 61 all gambling income is reportable. What generally gets reported is just the W2-G amounts. Given the difficulty of an IRS agent proving gambling winnings of a horse player it is highly improbable that such an investigation would occur unless they are chasing criminal activity

The IRS wants a share of everything even when they deserve zero. Very informative reply and appreciate it.
Regarding the TVG End of Year Reports. I have fallen off my chair when looking at these the last few years as my income increased so has my gambling. Was never one to keep records even though I have been betting horses for over 40 years. Primarily bet Pick 4's and 5's and occasional Pick 6 so would have stacks of W2G's.Now attempt to immediately withdraw when I have a big score.

[AndyC]

Originally Posted by Cuffdaddy

The IRS wants a share of everything even when they deserve zero. Very informative reply and appreciate it.
Regarding the TVG End of Year Reports. I have fallen off my chair when looking at these the last few years as my income increased so has my gambling. Was never one to keep records even though I have been betting horses for over 40 years. Primarily bet Pick 4's and 5's and occasional Pick 6 so would have stacks of W2G's.Now attempt to immediately withdraw when I have a big score.

Are you withdrawing to prevent escalated betting or to keep the IRS from grabbing it?

[AndyC]

The new betting regulations on reporting and withholding may created an interesting dilemma. Suppose 2 players both make the same bet, their only bets of the year, one at a track/OTB and one through and ADW. The bet is a $1,000 P-6 and they both win $100,000. Player A would collect his $100,000 at the track and because of no reporting being required will be anonymous to the IRS forever. (Forever provided he doesn't deposit the money in a bank account!) Player B would also not be troubled with any reporting or withholdings but will have a clear detailed record of his winnings for future scrutiny.

Each player clearly has gambling income of $100,000 for the year subject to taxes regardless of the fact that no reporting or withholding was done. In reality player A can pretty much ignore reporting his income and be almost certain that his anonymity will remain. Player B on the other hand will have a third party record of his winnings and probably deposits from the ADW to his bank account as well. Player B would be dead meat if the IRS decides to pursue
gambling winnings vigorously.

With sports betting being legalized, I can see a much bigger push by the IRS just around the corner.

[toddbowker]

Originally Posted by AndyC

The new betting regulations on reporting and withholding may created an interesting dilemma. Suppose 2 players both make the same bet, their only bets of the year, one at a track/OTB and one through and ADW. The bet is a $1,000 P-6 and they both win $100,000. Player A would collect his $100,000 at the track and because of no reporting being required will be anonymous to the IRS forever. (Forever provided he doesn't deposit the money in a bank account!) Player B would also not be troubled with any reporting or withholdings but will have a clear detailed record of his winnings for future scrutiny.

Each player clearly has gambling income of $100,000 for the year subject to taxes regardless of the fact that no reporting or withholding was done. In reality player A can pretty much ignore reporting his income and be almost certain that his anonymity will remain. Player B on the other hand will have a third party record of his winnings and probably deposits from the ADW to his bank account as well. Player B would be dead meat if the IRS decides to pursue gambling winnings vigorously.

With sports betting being legalized, I can see a much bigger push by the IRS just around the corner.

Not exactly correct.

Player A is still going to have reporting. For cash amounts over $10k, the track would have to file a currency transaction report with the IRS, and as you mention Player A's bank would also have to file the same report if they deposited it instead of hiding it under their mattress.

While Player B would have that third party record, no ADW that I know of would report the transaction (or your entire P&L) to the IRS unless they were subpoenaed to do so.

Nothing has changed as far as your responsibility to pay taxes on gambling winnings. The only thing that has changed is how much information the IRS has when you file (because of the new the reporting rules). Is it easier to cheat? Sure.

[AndyC]

Originally Posted by toddbowker

Not exactly correct.

Player A is still going to have reporting. For cash amounts over $10k, the track would have to file a currency transaction report with the IRS, and as you mention Player A's bank would also have to file the same report if they deposited it instead of hiding it under their mattress.

While Player B would have that third party record, no ADW that I know of would report the transaction (or your entire P&L) to the IRS unless they were subpoenaed to do so.

Nothing has changed as far as your responsibility to pay taxes on gambling winnings. The only thing that has changed is how much information the IRS has when you file (because of the new the reporting rules). Is it easier to cheat? Sure.

Thanks for the clarification. CTRs are certainly in play.

I am not suggesting that an ADW would report transactions that they are not required to report. I am simply saying that a permanent record of your unreported success is available for good or for bad. I also feel that betting accounts will see more scrutiny with the expansion of gambling.

The understanding as to what is supposed to be reported and what is reported will be even worse than before under the new regs.

[Cuffdaddy]

Originally Posted by AndyC

Are you withdrawing to prevent escalated betting or to keep the IRS from grabbing it?

Escalated betting, it is my Achilles Heel. Daughter in college , empty nest and find myself gambling to pass the time. Really foolish on my part.