Can recreational players in USA offset winnings with proven losses?

[RudyRuetigger]

Congrats rudy on the win

be careful when reporting it though

Solid 10k win for me

Amazing!!!

[RudyRuetigger]

I think technically you can offset. The problem is that you are only getting 1099s for winnings. So when you have losses, they are taking your word for it. So you get a 1099 for $1,000 in winnings and you don't report it, you get a letter from them and they start charging you 6% interest on the shortfall. Now you have to file an explanation and maybe they take your word for it or maybe they make you pay it.

Pretty sure they take your word for it, then if you get audited, you better have proof

[Roger T. Bannon]

Pretty sure they take your word for it, then if you get audited, you better have proof

Probably on small amounts. This is kind of unchartered territory. They don't actually have any rules on this, I don't imagine. The issue is that you are going to have your losses in separate accounts so if you are betting with one book, you don't have an issue. It is not something you have to worry about but if you have winnings at one book and losses at another, you have no way of reporting those losses or documenting them. It could create a headache and some anxiety.

[pimike]

You get a w-2g every time you cash out 10+ you have to account for cashing out that amount of money every time.


Most don’t transfer this kind of money at a casino or book regularly so have no clue.

This goes to the IRS not you so you don’t even know they reported it to them

[RudyRuetigger]

10,001 tomorrow tough guy

[Roger T. Bannon]

You get a w-2g every time you cash out 10+ you have to account for cashing out that amount of money every time.


Most don’t transfer this kind of money at a casino or book regularly so have no clue.

This goes to the IRS not you so you don’t even know they reported it to them

Oh wow. I never even heard of a W-2G.

[RudyRuetigger]

Probably on small amounts. This is kind of unchartered territory. They don't actually have any rules on this, I don't imagine. The issue is that you are going to have your losses in separate accounts so if you are betting with one book, you don't have an issue. It is not something you have to worry about but if you have winnings at one book and losses at another, you have no way of reporting those losses or documenting them. It could create a headache and some anxiety.

Atleast 2 guys in this thread seem pretty fukkin smart


And there''s just no possible way you pay taxes on 1 book but can't deduct losses from another

Your juice would be through the fukkin roof when you add year end taxes

[pimike]

10,001 tomorrow tough guy

You really are stupid aren’t you. You probably didn’t know what a W-2 Dash G was Didier because you’re stupid you’re a drunk fool

[pimike]

Oh wow. I never even heard of a W-2G.

Neither did I until I got audited. I know what I’m talking about, I had to pay a lot of money

[thomorino]

I think technically you can offset. The problem is that you are only getting 1099s for winnings. So when you have losses, they are taking your word for it. So you get a 1099 for $1,000 in winnings and you don't report it, you get a letter from them and they start charging you 6% interest on the shortfall. Now you have to file an explanation and maybe they take your word for it or maybe they make you pay it.

Everything is tracked online and the documents are very easy to pull up if you are betting at legal sites.

[Roger T. Bannon]

Atleast 2 guys in this thread seem pretty fukkin smart


And there''s just no possible way you pay taxes on 1 book but can't deduct losses from another

Your juice would be through the fukkin roof when you add year end taxes

That's got zero to do with whether you can actually report the losses and have the IRS not just require you to pay taxes on your winnings.

[RudyRuetigger]

Oh wow. I never even heard of a W-2G.

Yet here you are


Go read page 5 on winnings you fukkin morons

[Roger T. Bannon]

Everything is tracked online and the documents are very easy to pull up if you are betting at legal sites.

That is a lot more reporting than I would expect. But if you can print something off, it would at least give you some ability to offset losses and provide some proof. How many people are going to do this though? Probably not many.

[Roger T. Bannon]

Yet here you are


Go read page 5 on winnings you fukkin morons

Come on. You don't know anything about gambling winnings.

[RudyRuetigger]

Form W-2G (Rev. January 2021) (irs.gov)



Instructions to WinnerBox 1. The payer must furnish a Form W-2G to you if you receive:1. $1,200 or more in gambling winnings from bingo or slot machines;2. $1,500 or more in winnings (reduced by the wager) from keno;3. More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament;4. $600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or5. Any other gambling winnings subject to federal income tax withholding.Generally, report all gambling winnings on the “Other income” line of Schedule 1 (Form 1040). You can deduct gambling losses as an itemized deduction, but you cannot deduct more than your winnings. Keep an accurate record of your winnings and losses, and be able to prove those amounts with receipts, tickets, statements, or similar items that you have saved. For additional information, see Pub. 529, Miscellaneous Deductions; and Pub. 525, Taxable and Nontaxable Income.Box 4. Any federal income tax withheld on these winnings is shown in this box. Federal income tax must be withheld on certain winnings less the wager.Certain winnings that are not subject to regular gambling withholding may be subject to backup withholding if you did not provide your federal identification number to the payer.Include the amount shown in box 4 on your Form 1040 or 1040-SR as federal income tax withheld. See Pub. 505, Tax Withholding and Estimated Tax, for additional information.Signature. You must sign Form W-2G if you are the onlyperson entitled to the winnings and the winnings are subject to regular gambling withholding. Return the signed form to the payer, who will give you your copies.Other winners. Prepare Form 5754, Statement by Person(s)Receiving Gambling Winnings, if another person is entitled to any part of these winnings. Give Form 5754 to the payer,who will use Form 5754 to prepare Form W-2G for each person listed as a winner.Future developments. For the latest information about developments related to Form W-2G and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW2G.

[thomorino]

That is a lot more reporting than I would expect. But if you can print something off, it would at least give you some ability to offset losses and provide some proof. How many people are going to do this though? Probably not many.

Disagree, it’s very easy to do.

[The General]

Do realize that FanDuel and drafkings plus other gambling companies are paying so much tax that the us government don't give a fuk about your ass unless they have a red dot on you for doing something terroristic. Paranoid, uneducated, egotistical ppl. Geesh. Fuk.

[pimike]

Example

I cash in 10,000 on the Bacarrat table in total 24 hours. I cash out 10,000 at cashier window. They don’t care if it’s winnings or losing.


They report it all as winnings.


You better have detailed reports to prove it’s not winnings.

[RudyRuetigger]

Come on. You don't know anything about gambling winnings.

looks like you got buried, son


hows that 1996 computer working out for you?

[Roger T. Bannon]

OK, so you can report them as an itemized deduction which means you have to forego your standard deduction which it is not going to be worth for an average gambler for small winnings. So you are back to the problem of having a 1099 that you have income on and going to have to offset your losses. Not a position that I would feel too good about but I live in a state that I will not have to worry about it anytime soon. All of my gambling winnings go unreported.

[RudyRuetigger]

Thanks to the tax pros checking in

[The General]

I've worked in the sportsbetting business for over 20 years in many capacities. How many ppl I know have got caught up in tax problems as Players? ZERO......

[RudyRuetigger]

As noted several times in this thread, it is correct that as a recreational player you can itemize your losses up to the amount of winnings on a federal level. It can wreak havoc on your return though as it forces you to itemize. Also, it can jack up your Adjusted Gross Income and phase you out of certain benefits. There is a handful of states that do not allow gambling losses as itemized deductions and/or have other rules that have the gambling income treated different on a state level. Perhaps Mike's issue was on the state level.

This guy clearly knows his shit

[pimike]

Not here to argue with anyone.



I’m just telling you after my audit. I got screwed. I had to prove I was professional to get stuff written off as loses .

They tried to screw me big time.

[The General]

Wanna be fukin pros. This entire thread is about nothing but chit.

[The General]

And my friend, rudy thinks it's a hot topic or wants it to be. In reality, the kids are playing hopscotch here. Enjoy.

[RudyRuetigger]

tax pros assume i am in an average state (the one with the most baseline rules)


So if I win 100k at fanduel



lose 102k at draftkings



make 100k per year at my job


what would you do with my gambling winnings?

[RudyRuetigger]

And my friend, rudy thinks it's a hot topic or wants it to be. In reality, the kids are playing hopscotch here. Enjoy.

uhhh i wanted to bet 100 points on it


mike said 10k dollars



relax and go back to bed


you are out of your mind if you dont think we are going to have my scenario above all the time

[Roger T. Bannon]

Not here to argue with anyone.



I’m just telling you after my audit. I got screwed. I had to prove I was professional to get stuff written off as loses .

They tried to screw me big time.

Yeah, if you get a 1099 you are going to have to report it and they are not going to be real interested in your losses at some other book. That would require some favorable treatment. In any case, you would have to stand on your head to get an offset.

[Roger T. Bannon]

tax pros assume i am in an average state (the one with the most baseline rules)


So if I win 100k at fanduel



lose 102k at draftkings



make 100k per year at my job


what would you do with my gambling winnings?

That is the nightmare scenario. Try it and tell us how you make out.

[TommieGunshot]

Lots of wrong information here.

Here are the basics: https://www.irs.gov/taxtopics/tc419

Here is a great article that goes into much more depth: https://www.thetaxadviser.com/issues...-gambling.html

Tax law says that all winning bets count as income and need to be reported, only exception is "Case law and IRS guidance have established that a taxpayer may determine gambling winnings and losses on a session basis." But "sessions" are mostly only helpful to the blackjack or slot player, not sports bettor. All winning bets get added up and entered as income; all losing bets get itemized, up to the point where they equal the winning bets.
To clear up a few things. According to tax law, W2s serve no purpose as far as what you owe in taxes. Any money won counts as income whether you got one of those or not.

Win-loss statements are also complete bullshit. I could go to a casino, start playing a slot machine, then when I saw it was getting close to a bonus round, pull my card and the casino won-loss statement would show me as a much bigger loser than I really was. I could do something similar with sports: find a bet where one book has +900 and another book has -900. Bet $10,000 on the +900 on my account, then bet $90,000 on the favorite with a ticket writer. About 90% of the time, the casino will have me recorded as losing $10,000, while 10% of the time I will be recorded as winning $10,000, but offset that with a losing ticket.

Here is another great piece on gambling and taxes: https://easy.vegas/gambling/taxes

Ultimately, when it comes to tax liability, the best thing a "recreational" gambler can do is to stop being "recreational". Act professional. Even if there is not a professional level income. As far as how it actually gets reported, that is between the individual and the IRS. But if there is ever a disagreement, solid record keeping can save someone a lot of money.

[mem5757]

OK, so you can report them as an itemized deduction which means you have to forego your standard deduction which it is not going to be worth for an average gambler for small winnings. So you are back to the problem of having a 1099 that you have income on and going to have to offset your losses. Not a position that I would feel too good about but I live in a state that I will not have to worry about it anytime soon. All of my gambling winnings go unreported.

this is 100% correct. 90% of average people take standard deduction, being able to itemize losses DOES NOT HELP THEM. I've already made a concrete example of proof of how average person still get screwed.

yes this is true, so even if you "offset" your winnings with losses you could still pay more in taxes since you have to forfeit the standard deduction if you itemize.

lets use an example: single guy has 60k worth of taxable income from his job. he uses the standard deduction of 12k, now he has 48k worth of taxable income for that year.

next year the same guy still has 60k in taxable income from his job, but now he has 20k worth of W2s from Fanduel. He itemizes and offsets them with 20k worth of losses from DraftKings, but since he itemizes he forfeits the standard deduction, so now his taxable income is still 60k, instead of the 48k that he was taxed on the previous year.

So point is you want to try to avoid triggering W2s and 1099 forms whenever possible, because even if you offset them you still pay more in taxes since you are forfeiting the standard deduction and with gambling losses you are only allowed to deduct up to your winnings, unlike stocks where you can also deduct losses.

[mem5757]

I've worked in the sportsbetting business for over 20 years in many capacities. How many ppl I know have got caught up in tax problems as Players? ZERO......

20 years ago is not relevant to today. sportsbetting only became legal in most states last year. why do you think government made it legal? it's so they can tax it.

[ChiLLx]

No, it’s not wrong. If you win a 10k bet than lose a 100k bet you have a net lose and no income so you owe no taxes.

This is why people pay taxes at the end of the year, not weekly or monthly.

This is completely incorrect for individuals filing at the federal level and take the standard deduction.

[thomorino]

This is completely incorrect for individuals filing at the federal level and take the standard deduction.

No it’s not.