Dear Mark,
You said on slot
winnings more than $1,200, the dreaded IRS form must be completed.
Having never won a jackpot of this size before until recently at
Stateline, NV, I am confused. It took that much of my money to win that
jackpot. How can I offset the tax due on my win with my losses? Lucille
O.
You can offset your gambling losses
against your winning jackpot on Schedule A as an Other Miscellaneous
Deduction, but only to the extent of your gambling win, not your income
from a 9-to-5 job. Gambling winnings are reported on tax form 1040 on
the Other Income Line. Reportable gambling winnings include lotteries,
bingo, raffles, horse and dog racing and all casino games, legal or
otherwise. Yes, even an illegal bet on Denver in the Superbowl can be
considered a gaming win, or if you wagered on Atlanta, a deduction.
Also, Lucille, you must be able to
substantiate your losses with flawless documentation. How? By supporting
your losses with a descriptive gambling diary. You do this by keeping
track of all wagering tickets, canceled checks, bank withdrawal
statements made at the casino and credit receipts as your proof. Granted
it is impractical to record every pull of the handle, but by keeping a
daily log of where you played, how much you gambled and how much you won
or lost will be acceptable evidence for substantiating your triumphs and
tolls of gambling.
By the fact that you have never won a big
jackpot before, I infer that you probably did not keep factual gambling
records of your slot play. Don't despair; that is, if you use a slot
club card. Most casinos use some form of computerized tracking system
similar to the one called the SMART system (Slot Marketing and Revenue
Tracking System) that IGT provides the casinos. With these Smart
systems, the casino records your detailed playing history. Because your
play is tracked electronically when using a slot club card, the casino
should be able to provide you with the documentation needed to
corroborate your losses.
One final thought, Lucille. Don't just
get your recorded play at the casino where you hit it big. Go back to
the other casinos where you have used a slot club card and ask for a
printout of all your play on their machines for that year. I state "that
year," as gambling losses can be used only to counterbalance gambling
winnings during that same tax period. They cannot be carried forward or
back to any other tax year.
Dear Mark,
I love to play Nevada
Megabucks but can't afford $3 every pull. Occasionally I try to second
guess the machine's rhythm of hot and cold cycles and play accordingly.
Obviously that means playing less than $3 each time. Is this a bad
strategy? Rob S.
With
all my parochial schooling, Rob, I always thought the rhythm method had
something to do with birth control.
No progressive machine, Rob, should ever
be played without the maximum amount of coins required. With all
progressives, a percentage of all coins played goes into the progressive
jackpot that continually grows until some lucky soul hits it. But if you
don't play the maximum amount of coins, you can't retire from your
crummy job. Your jackpot with one coin inserted would be a picayune
$5,000-not enough to tell your boss to "shove it." I suggest you look at
a progressive meter and consider what a nincompoop you would be if you
lined up the three Megabucks' symbols but failed to risk two additional
tokens.
