Originally posted on 04/16/2011:

Good info from MTneer.

The keys to taxes for gambling are as follows:

1) For table games there are never any taxes deducted. However that does not mean no taxes are due. Rather the burden is on the player to report the winnings, if any, at the end of the year.

2) In the sportsbook taxes are not deducted unless your wager meets both of these requirements; (a) it must pay more than $600, AND (b) must be odds of 300-1 or greater. Usually this happens frequently in the racebook because hitting a 300-1 parlay or futures bet is odd.

3) If you bet $11,000 on the Lakers -5 and the ticket wins, when you go to cash it if you take chips instead of cash you will not have to have a CTR (currency transaction report) on the transaction since you did not take cash (yet). If you decide to take cash instead of chips then the book is required by the IRS to file a CTR on the transaction. However even though it is a form that goes to the IRS it has nothing to do with taxes. The purpose of CTRs is to track large cash transactions to monitor money laundering. CTRs are used by customs, banks, and more and again have nothing to do with taxes. So the fear that by filing a CTR when you cash your ticket out of tax concerns is unfounded.

4) if you win more than $1200 at a slot machine you will be issued a W2-G which will be reported to the IRS and you will need to report that for that tax year otherwise you risk an audit. However if you have losses, you can have your accountant file your win loss statement with the return and no tax will be due. Any taxes that were withheld when you won would be refunded. State law varies dramatically on how gambling winnings play into your overall income level and tax rate but federal is simple. At the federal level if you lost more than you won then no tax is due and your bracket is not effected.

5) If you take chips at the sportsbook to avoid filing a CTR, when you cash those sports chips at the cage for the over $10k, the cage will then file a CTR because you received/handled currency over $10,000. This is why I said "yet" in my sportsbook discussion on CTR. If you cash in your sports chips at the cage in amounts under $10K to avoid the CTR you are breaking a law and committing a crime called structuring. If the casino feels a patron is committing structuring they are required by law to file a SAR (suspicious activity report) on you. Many of these are filed in casinos every day and nothing is done on them. However if you get 4-5 filed on you (and you never know when they get filed as the casino doesn't tell you) then you could get a call from the Secret Service or the IRS. You better have a good reason and explanaton otherwise you will be subject to penalty, forfeiture, and prison potentially. By the way, for anyone who has a cute or obvious excuse, these guys have heard it all. Even if they dont charge you, their call will put you under a money microscope for the next five years. Since a CTR has nothing to do with taxes and assuming you are not laundering money, just take the cash at the book, have the CTR filed and be done. That way you can never have this issue.

6) A lot of people don't realize if you bet $11,000 on the Lakers and use cash to place the bet, the book files a CTR at the time you place the bet. It is why they ask for your players card. They pull up your personal information and the computer files the CTR in one easy step. They put your players number into their system and a CTR is generated. The reason, you just engaged in a cash transaction over $10,000.