Read this in the Athletic. I have a subscription but you may be able to read it for free. The big bill, I can’t bring myself to call it “beautiful”, has a section that states that gamblers can deduct only 90 percent of their annual losses, instead of 100 percent, which has been the norm. Here is the actual text in the bill:
According to the article, gamblers would report their betting income by taking their gross winnings, subtracting their gross losses and then report the net amount as their taxable income. Under the big bill, they are allowed to subtract only 90 percent of those losses, which means they appear to have more income, even though they don’t actually have that money.
The article gives an example of a gambler with gross winnings of $100,000 and gross loses as $100,000, still being taxed $10,000 as income, even though they netted zero dollars.
BTW, this thread is technically politics though it is generally informational right now. If we keep it like that, I don’t think its an issue, if it becomes something more then it will likely get closed.
Curious as I am not a big money gambler, but at what level does this even get noticed?
I mean $100,000 yes, but probably not at $500 winnings and $500 losses. What level starts to get reported?
Duce630
(DustinK - Still 50 hostages held by Hamas for over 630 days)
5
Well, if you win even $1 you technically should report it as income.
Generally speaking most people report only when they have W2G. This mentions the federal threshold but if there is required state withholding, you could get a W2G for winnings less than these amounts.
I generally lose more (maybe $100) than I win but I mark it as entertainment expense not trying to come out ahead. Though this reminds me that I do need to take a trip to Lake Charles to place an over bet on the Coogs. Maybe next week if not raining much.
Duce630
(DustinK - Still 50 hostages held by Hamas for over 630 days)
7
Yea your loses would offset and it would be zero. Though under the new law, you could only offset 90% so it would be recommended to report the income and the losses, that would make $10 out of every $100 in winning to be taxable income at a minimum.
In actuality, all your gross winnings are income and are part of your calculation of your AGI (or above the line income). So you should be reporting them because that AGI does affect other tax attributes or calculations. The losses are a below the line deduction or an itemized deduction. I assume that will be the same under the new law, but haven’t looked at it yet.
I read somewhere that itemized deductions were being simplified or limited I think. Did not look into it.
Duce630
(DustinK - Still 50 hostages held by Hamas for over 630 days)
9
I haven’t really gotten the full scope of the bill yet, as it is new. Of course the actual regulations resulting from it are yet to be issued. I do know this, the messaging about some of the provisions is misleading. There are going to be a lot of conversations where tax professionals as myself are having to explain to people why their Social Security is taxable, etc. Not looking forward to some of those conversations.
I remember in 2017 they were pitching that you would be able to file your tax return on a postcard. That of course was not close to true but they definitely went in a different direction of simplifying this round.
Duce630
(DustinK - Still 50 hostages held by Hamas for over 630 days)
14
They had a really stupid form redesign to try and accomplish that, but abandoned it after one year. I forget what year it was, but I know earlier this year a staff member with maybe two years experience had to look at the form (we were preparing delinquent returns) and he was totally confused. I had to explain it to him.
