Page 32 - January 2008 • Southern California Gaming Guide

by Gail Anders
It’s the New Year and time for New Year’s resolutions. Like many people, each year I resolve to get more organized. I’m a casino player, and 2007 was a pretty lucky year for me at the casinos in Southern California.
Of course, I kept all my W-2Gs, and better than that, at the beginning of 2007 I followed through on one of my resolutions and started a casino logbook. So just a few weeks ago, I took a look at my logbook, and I was surprised. I realized while I’d won more than I lost, I had gambling losses to deduct from my winnings, so I wasn’t going to have to pay as much in income taxes on my winnings as I originally thought.
Yes, Uncle Sam demands a share of our luck at the
won, and any identifying numbers of the gambling device the player used to win. e W-2G must be signed by the winner as proof that the correct Social Security Number was
submitted to the casino or gambling venue.
Winnings are Taxable Income
Players are required to list all gambling
and jackpot winnings when ling their income taxes. Gambling winnings are taxable income. e IRS
allows you to deduct gambling losses up to the amount of your winnings. And, you can only do this if you have documentation of your losses. Keeping a diary or logbook, therefore, is the best way to do this.
Proof of Losses
If you are ever audited by the IRS, when you have a logbook of your winnings and losses, you will have at least the basic records to show where, when and how much you gambled. You also must keep any ATM receipts, cancelled checks or bank statements showing casino transactions to back up your logbook.
e idea is that your logbook has to be as accurate as possible. I’ll leave the professional tax audit advice to a CPA, but at least with a log, you’ll have a good start in showing your gambling records.
Logbook Insights
I keep my logbook on my computer, in the spreadsheet program, Microsoft Excel, but you can also keep it simply in a notebook by hand. I like to keep mine in Excel because Excel can automatically total my winnings and losses as I make additions to the log. I set it up with eight column headers: Date Played, Time, Casino, Casino
Address, Game Played, Winnings, Losses, Proof.
casino. And from past don’t keep a record or a log of your casino play, you won’t know what you’ve won over the course of a year, or more importantly, what you have lost. Your losses are a key element in deter- mining your income taxes on your win- nings, not to mention how you may view or adjust your future play at the casino.
W-2G Forms
experience, I found that if you
Within a few months of starting my log, I added two other columns: one for the amount of my gambling stake each time I went to the casino; and the other for the amount of what I left the casino with. ese two columns are not for the IRS or potential tax relief—but for me to be aware of my gambling and how I played. I was shocked to notice that on certain casino visits I would win jackpots and play most of them back! So I became very mindful of how I was playing at the casino. ere is a tendency for casino players, particularly those who have won large jackpots, to “chase” a big win and in the process, lose more than they have actually won. So while keeping a logbook is a necessity for your tax relief, it is an incredible tool for being aware of what you gamble.
Of course, I also found that keeping my logbook helped me realize how much I was winning and losing over the year. Casino players tend to use selective memory and tend to remember only the wins and minimize their losses. If you keep a log, it can give you a reality check and an account of the money you spend at the casino. It’s worth the time to do—and who knows—it may save you lots of money in taxes when you hit that Big One.
If you visit a casino more than a few times a year, do keep a logbook. I heard about a player who hit a large progressive jackpot on a New Year’s Eve. She had been losing all year long, but didn’t have any way to prove her losses and ended up paying the full taxes on the jackpot amount.
I know I am in excellent company in advocating keeping a casino logbook. Make certain you read Bill Burton’s column on page 6 of this issue, for he includes keeping a log as an excellent goal for any casino player. And for one of the de nitive words on taxes and gambling, you must read Jean Scott’s column in this issue on page 29—and I recommend you purchase her newly expanded book,
Tax Help for Gamblers. I just ordered my copy.
Gail Anders writes for travel magazines and lives in Laguna Beach and Bridgehampton, New York. She says she loves to play in Southern California casinos.
As most gamblers know,
the Internal Revenue
Service (IRS) requires
casinos to report on a
W-2G form all players’
jackpots of $1,200 or
more on slot machines
or other games. e
W-2G form lists your
name, address and Social Security Number plus other pertinent information to you win. When you win a jackpot of $1,200 or over, casinos require your proper identi cation and Social Security Number before they pay you. So always be certain to carry a valid form of identi cation with you when you visit a casino. Some casinos even have jackpot winners sign forms attesting that the Social Security Number they give to the casino is valid and is, indeed, their Social Security Number.
Casinos are required to send a copy of all W-2Gs to the IRS, and to give or send players a copy the W-2G with their winnings clearly stated. e W-2G form indicates the name of the casino or gambling venue, the amount
Page 32
SOUTHERN CALIFORNIA GAMING GUIDE
January 2008