14-05-2021

Online Casino $1200 Taxes

BV3273

Currently, Indiana’s personal income tax rate is 3.23%. Almost all gambling winnings are subject to this tax. Casinos typically withhold 25% of your winnings for tax purposes. That is only the norm if you provide them with your social security number, however. If you decline that option, they usually withhold 28%.

I just got a packet in the mail and I am about to have a heart attack. It is a W2G from the Borgata for my online gaming in 2018. It shows I have wins of $318,000. It is listing all of the big blackjack hands I won as jackpots. Obviously this is incorrect. A jackpot in my mind is a win which is 300 times your original bet. None of these wins qualify for that. I never cashed out any of this money. I just continued playing till it was gone. The question is now what do I do? These are not slot wins that should be considered as jackpots. I am not sure why they were registered as such on this W2G.
Any and all advice is appreciated. I’m literally freaking out right now.
I plan on calling some accountants that work with gamblers tomorrow to see if they have any insight.
Please tell me the casino got it wrong and I’m not on the hook for all these “jackpots”.
-BV
FCBLComish

I just got a packet in the mail and I am about to have a heart attack. It is a W2G from the Borgata for my online gaming in 2018. It shows I have wins of $318,000. It is listing all of the big blackjack hands I won as jackpots. Obviously this is incorrect. A jackpot in my mind is a win which is 300 times your original bet. None of these wins qualify for that. I never cashed out any of this money. I just continued playing till it was gone. The question is now what do I do? These are not slot wins that should be considered as jackpots. I am not sure why they were registered as such on this W2G.
Any and all advice is appreciated. I’m literally freaking out right now.
I plan on calling some accountants that work with gamblers tomorrow to see if they have any insight.
Please tell me the casino got it wrong and I’m not on the hook for all these “jackpots”.
-BV


According to the instructions for form W2g, you should receive one for Table Games if the win is:
a) At 300:1 odds or greaterTaxes
b) Over $600
If the total winnings minus the wager are over $5000, then Federal Taxes must be withheld.
https://www.irs.gov/pub/irs-prior/iw2g--2019.pdf
I think they sent you the wrong form.
Will they give you a win/loss statement?
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BV3273
I looked up my win/loss for 2018 and it shows that I only lost around $10,800. That is the amount of money that I actually deposited and lost.
What they sent me was basically a list of all the large hands I played on one day with a few exceptions. All of the transactions, “wins”, took place on one day in August 2018. Some of my bets did reach over $1,000 each but I lost that money right back.
I live in New York and not New Jersey if that matters.
I am totally at a loss. They only recorded the big hands I won and listed them on this report. I wonder if I can get a list of all the large hands that I lost which would totally offset this amount.
Any thoughts?
DRich
I believe New Jersey treats all online gambling as an Electronic Gaming Machine. On EGM's all wins of $1200 or more are considered jackpots. I recall others complaining about their online Blackjack wins receiving W2G's a few years ago.
It would be the same if you played a Blackjack machine at a casino and won over $1200.
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Minty
You can report your gambling income without using W2Gs, and from what I've read on here lately, W2Gs just seem to complicate things.
'Just because I'm not doing anything illegal, doesn't mean I won't have to defend myself someday.' -Chip Reese
BV3273
So do I have to pay taxes on these “wins”? I never actually touched any of this money and lost it all.
DRich

So do I have to pay taxes on these “wins”?


You will be able to write off your losses against wins on your Federal return but I don't think New York state taxes allow deducting gambling losses. Check with an accountant but you may be taxed on the whole $318,000 for your state taxes.
Living longer does not always infer +EV
BV3273
I am so confused. These big blackjack hands don’t qualify as a jackpot based on the definition by the IRS. How would I have to pay taxes on these winning hands?
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Minty
The proper thing you're supposed to do is add your winning sessions together and file that. Add all your losses together and put that down as well. It's important to note that winnings aren't defined as your profits minus your losses for tax purposes. You can't have losses exceed your winnings either.

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It's kind of crappy.
'Just because I'm not doing anything illegal, doesn't mean I won't have to defend myself someday.' -Chip Reese
DRich

I am so confused. These big blackjack hands don’t qualify as a jackpot based on the definition by the IRS. How would I have to pay taxes on these winning hands?

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Because what you are reading pertains to playing a live table game, read the sections about slot machine jackpots. Any payout of $1200 or more is a W2G. I think they consider playing on an electronic device the same as a slot machine.
Living longer does not always infer +EV