Gaming Guru

A Tax Preparer Comments on Taxes on Gambling Winnings

My feelings on gambling winning's and losses is the winnings are a capital gain and should be taxed. I don't feel it's our goverment's fault that you lost money gambeling. They should not allow us to deduct gambling losses. We are taking a chance when we gamble. I don't feel it's the goverment or the tax payers place to cover our gambling losses. Why do we always feel if we loose something it's allowed to be claimed on taxes and our goverment should pay us back. I don't want to pay someone elses losses with my tax money. It should be used more wisely. I play the slots and if I win I pay my taxes on my winnings. I also claim my losses up to my winnings because I am allowed to do so. I do taxes during tax season and have been for 8 years now and see this alot. Gambling losses fall under misc deductions and must meet the 2% rule of your AGI. Alot of older people can't itemize deductions ( and younger people ) because they do not have enough deductions to itemize. I feel, if you win, pay your taxes on your winnings. If you loose, better luck next time. Gambling is not a profession or a job even thou there are professional gamblers and we as tax payers pay for their losses up to their winnings. To me gambling is a hobby not a profession.

Mike

Dear Mike,

I really don't think any of my correspondents want to be able to deduct gambling losses the same way they could deduct losses on a business venture or a stock or bond.

We're arguing that the amount that has to be claimed as winnings should really be true winnings and not just the sum of the W-2Gs we've been given. Let's say I lose $5000 playing slots, but get 2 W-2Gs for $1200 each. I have to claim $2400 in winnings, but I really lost $5000. As you point out, I may or may not be able to deduct $7400 in losses.

As you said, "If you win, pay taxes on your winnings." But the way the system works today, many people pay taxes on "winnings" that are inflated or not even real.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.