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Taxation of Gambling Payout

Do you enjoy wagering? Many people find it enjoyable and relaxing to go to a casino and spending some time at the spots or tables. A big problem we see ทดลองเล่นสล็อต as accountants is that most people don’t understand how the payout affect their tax return. Here are a couple of examples.

About 25 years ago a good friend of acquire called me and told me her elderly parents had gone to Wendover, NV and won $50, 000 playing a quarter slot machine. They lived on their Social Security and wasn’t required to file a tax return in several years. They wanted to use the money to buy a house, you could do that 25 years ago, but were scared about how much taxes they will have to pay. It proved they were able to pay the tax and get a house, but because of the added income, they had to pay taxes on their social security income, which they normally would not have had to do.

Another couple I know lived in a town with several casinos. One of their past times was going to the casino after work. Over the course of a year, they had won $250, 000. However, they had actually spent more than their payout. They both had good jobs and only one dependent. When we figured their taxes they payable a lot of money. They couldn’t realize why they payable so much when they spent more than they won.

It has not been an accounting error; wagering payout and expenses are taxed differently than other income and expenses. Let me explain. Your payout are included in your adjusted gross income, but what you spend is deducted on a Schedule A. Now, if your adjusted gross income is too much, the IRS places limits about what you can deduct on your Schedule A and other places including medical expenses, college tuition credits, child tax credits, exemptions and employee business expenses. These write offs are limited before your wagering losses are deducted. This means that even if you break even with your wagering payout you are going to loose valuable tax write offs, which will cost you even more money.

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