Page 6 - February 2007 • Southern California Gaming Guide

Page 6
SOUTHERN CALIFORNIA GAMING GUIDE
February 2007
The Frugal GamblerTM: Jean Scott
Gambling and Taxes
For years people wrote to me, often in a panic, about tax problems connected with their gambling. A newbie wanted to know what he should do with the W-2G form the casino gave him when he won his rst big jackpot. A long-time player begged for some advice
on how to cope with an IRS audit notice about her gambling wins. I soon realized that few gamblers knew even the basics about tax issues. So I decided to write a book that would help them. I got some expert input from Marissa Chien, my tax preparer and a gambler herself, and
Jean Scott, The Frugal GamblerTM
Tax Help for the Frugal Gambler was published. At the beginning of the book I made the point that
most gamblers (and many tax preparers themselves) had erroneous ideas about taxes.
“Paying taxes on my gambling wins? You’ve got to be kidding. Sure, sometimes I win, but my losses are always much larger than my wins by the end of the year. So I don’t have to mess with it on my federal or state tax returns.”
Wrong! You probably should“mess with it,” especially if you hold any of the following common but mistaken beliefs:
• I can lump together all my wins and losses for the year and, if I have a net loss, I don’t need to put wins or losses on
my income tax returns.
• •
If I don’t get any W-2Gs, I don’t have to report any gambling wins on any income tax forms.
If I do get a few W-2Gs, I can just count that total as my gambling income for the year and be safe in an IRS audit.
After all, I didn’t have any gambling income.
• e IRS can’t “catch” me, even if I win a lot of money gambling, as long as it’s done slowly over a considerable period of time in di erent gambling venues and I get no o cial forms like a W-2G.
“...many tax preparers are not gamblers themselves and/or are not knowledgeable about the tax issues of gambling. So even though you don’t do your own tax returns, every gambler should
• Federal and state tax agencies know most gamblers lose over the long term, so they aren’t very interested in auditing gamblers.
gamblers are taxed heavily on the state level. Tax Help for the Frugal Gambler discusses how this leads some gamblers to le as professionals, although that is an
is faulty thinking needs facts. Tax Help for the Frugal Gambler covers the basics, discussing why gambling wins must be reported on your tax return, what a gambling session is and how it can vary depending on personal circumstances and the games played, and what player record-keeping is necessary. Samples of my own gaming diary are included in the book.
ere’s an entire section on state taxes, with a chart giving information for residents of all 50 states and/ or visitors who gamble out of their home state. e IRS stresses that you cannot add up all your winning sessions and all your losing sessions
have at least enough of a basic and give a net win/loss gure at the end of the year.
area fraught with danger, and you need to know the rigid requirements.
Many people say, “I just give my tax preparer any paperwork I get from a casino and he/she takes care of all the details; I don’t need to know all this stu .”
Marissa gives this warning early in the book: e problem with this thinking is that many tax preparers are not gamblers themselves and/or are not knowledgeable about the tax issues of gambling. So even though you don’t do your own tax returns, every gambler should have at least enough basic knowledge of tax issues that a ect him or her; and that they are able to make a good choice of a knowledgeable tax preparer and provide enough records so that the
preparer can do the best job.
If you want to learn more about taxes and gambling, you can order Jean Scott and Marissa Chien’s book, Tax Help for the Frugal Gambler, at Jean Scott’s web site, www.QueenofComps.com. All Jean’s products are available on her web site, including her new book, Frugal Video Poker by Jean Scott and Viktor Nacht.
knowledge of tax issues that affect him or her”
Since many states follow the federal reporting form, but do not allow deductions for gambling losses, many
Sue Forbes
CA DRE #01308927
Ready to Make Your Move?
Whether you are buying or selling a home, I am committed to getting the job done. With 6 years experience in Southern California Real Estate, your satisfaction is my top priority!
Free Recorded Message: 888-806-8656 Ext. 108
Or call me directly: 619-686-5524
www.SueForbes.net