tax gambling losses
Monday, July 5th, 2010tax gambling losses
sample letter of gambling loss for tax purposes?
Contact the casino’s at which you gambled (if you used a players club card) they can provide you a letter showing your loss.
If however you did not use a card, the next best thing might be to use atm receipts (from the casino), or checks you cashed.
You can only write off winnings to the extent of loss so if you don’t have proof of loss you cannot reduce your winnings.
tax gambling losses
Hit With Casino Winnings Taxes? Get A Us Casino Jackpot Tax Refund
Canadian Gamblers: US Gambling Taxes Can Be Recovered!
Have you won a US casino jackpot, and subsequently was hit with the IRS’ casino winnings taxes? You deserve to enjoy your US casino jackpot in full! As a Canadian gambler, you are eligible for a partial or full rebate of your casino winnings taxes.
The Canadian-US tax treaty entitles Canadian gamblers to enjoy the same treatment as US gamblers. American gamblers are eligible to file for a rebate of their casino winnings taxes when they do their annual taxes. Yet many Canadian gamblers are unaware of this fact, let alone file for an IRS rebate of their casino winnings taxes.
Canadian gamblers with US gambling losses are eligible to deduct their US gambling losses against their US gambling winnings. Anyone with US gambling losses equal or greater than his/her respective gambling win will get a rebate for all of his/her casino winnings taxes. Canadian gamblers with fewer gambling losses will get a partial rebate of his/her casino winnings taxes. Here’s a sample calculation of a gambling tax refund; our gambler, Martin wins $5000 USD at slots. He is subsequently assessed casino winnings taxes of $1500 (a 30% withholding tax multiplied by a jackpot of $5000 USD equals $1500 USD). Martin also has corresponding US gambling losses of $6000 USD. Thus he is eligible for a full rebate of his casino gambling taxes.
The IRS has difficult and often confounding rules regarding non-Americans who wish to file US tax returns. Yet the services of an IRS Certifying Acceptance Agent can and will greatly ease the process of obtaining a rebate for your casino winnings taxes.
Before Canadian gamblers can apply for a refund of their casino winnings taxes, they will need an IRS ITIN number. Gamblers will receive form 1042-S automatically from the casino when the jackpot is first paid. However, many people lose or misplace their form 1042-S, and will have to contact the casino for a copy. If the US casino jackpot winner does not have an existing ITIN, an IRS Certifying Acceptance Agent can obtain an ITIN for him/her.
The IRS will levy the casino winnings taxes on certain games with several monetary thresholds. For example, a US casino jackpot of $1200 USD will have a tax of 30% withheld, whereas a blackjack win of the same amount will be tax free. In general, table games do not have the US casino jackpot tax applied to them. Slot machine jackpots of $1200 USD or more will have the US casino jackpot applied to them. Strangely, while poker and blackjack are generally not taxed, poker and blackjack tournaments ARE taxed. Game show winners are also assessed the casino winnings taxes. Game shows don’t have anything to do with gambling, but they are subject to casino winnings taxes. It does not really make sense, but those are the IRS’ rules.
You hit the US casino jackpot. You are entitled to enjoy it to its fullest! Contact US Gambling Refund for more information or to help you reclaim your partially withheld US casino jackpot!
About the Author
Lucky Larry specializes in cross border gambling taxes and is experienced at IRS gambling refund claims and pursuing ITIN numbers on behalf of Canadians.
Should a professional gambler who file Income Tax as a gambler, report losses & wins from online gambling?
Online gambling is considered an illegal activity, however I feel like I should report my wins and losses in that area just the same as I report them from casinos. Will I get in trouble with the law by admitting that I gamble online (as millions of others do.)
I agree with the answers provided above, but with one caveat. Illegal business activities are not allowed to deduct business expenses. So reporting the illegal gambling winnings on a Schedule C would mean that no expenses can be claimed. This would subject the gross winnings (from illegal gambling) to Self-Employment Taxes. This will increase your taxes, and not provide you with the benefit of deductible expenses.
So, I would list this income as gambling winnings, with losses reported on Schedule A as an itemized deduction.
Hope this helps.
William
Tax Tips 2010 series 8 of 15
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