[QUOTE=gengar;20190827]Actually, the reason why casinos don't allow the simultaneous red-black bet is to limit gambler access to a low-volatility way to wash promo chips and coupons. It's not a house advantage issue (I've been to casinos where they do allow it!). The only reason why the numbers in your "strategy" slant positive is that you're counting the match play if you win but not if you lose.

I've actually seen a casino allow the simultaneous red-black bet when someone was trying to clear some promo chips two different times. The second time I was smart enough to bet green - the poor sap was pissed but I tipped him a chip to make him feel better.

Absolutely I'm talking about washing them, and allowing the washing puts the house in a worse spot, hence the disadvantage...

I'm not sure about the table tips point- I'd argue it with the IRS as a cost of the transaction, and expense against the income. Might well fail but I think it's right in principle, I'm certainly not trying to be underhand with the reporting here. In fact large poker tournaments have forced tipping so the IRS w4 for that win would be interesting to see if it was net or gross of the tip.

Also, I believe I read somewhere that pro gamblers can expense all manner of things such as travel and accomodation (if it isn't comped). I wonder what it takes to be considered a pro... Have to look into that.

No - again, as I said, it is simply less volatile. It doesn't put them in a "worse spot" or a "disadvantage". You need to be careful about the terms you use - they mean different things. A house advantage is different from volatility which is different from any arbitrary end result of a play session.

No, it's not right in principle. Keep in mind that if your tip bet loses, that is also deducted from your win/loss, so there is no "unfair" or even disparate treatment. You are the person betting that tip, and it is considered no differently from anything else you bet.

Tax law + gaming is not just something you make up. ;)

The IRS is very strict, and requires an immense amount of documentation and back-up data.

I do not think you would get away with this on any level.

It's hard enough to even deal with the everyday (gaming) tax issues. In addition, how are you going to "prove" what you tipped? I can only think of perhaps, a "tip-journal," but that's going to be very interesting if you ever get audited.

A good place to start, if you are a professional player and/or recreational player that has many W2-Gs and has to offset losses etc.

I understand how the current law works, I just think it is unfair and should be challenged. People do challenge the tax laws.

I have enough loss to wipe my w4-g so its not relevant to me anyway, I am just saying I don't think its fair and I might just go ahead and say so to the IRS if I was in that situation.

Challenging the IRS in a situation like this probably requires accountants and lawyers (whose cost) would probably exceed the expectation. It's not like there is a huge good samaritan contingent out there that is feeling horrible about gamblers who tip heavy, and then want to offset the tips against wins (as losses)

Representing yourself in tax-court, against the IRS could be very dangerous.

There are many things that are unfair, especially with regard to the IRS. You just deal with it the best you can. Believe me, this (deducting tips), is probably one of the least substantive complaints against the IRS. In any case, people shouldn't be tipping that much anyway. (and those that do tip on extreme levels are hardly worried about the tax implications).

I'm always worried about the tax implications. It annoys me no end when I finish a trip and they have net out by 2-3K.

Personally it feels wrong, I look at trips like this like a profit center and if the IRS does too (by wanting to tax the win) then they should realize a profit center comes with costs.

Furthermore it annoys me even more when the Hosts come back with 'oh you won, we didn't comp you for the entire trip, but you still made out' after you kick the dealers the profit they think you won and you walk out with less money than you started with.

I feel your pain (but, quite frankly, I only tip "on-top" for dealers; and if I hit a nice run, so do they....)

But, there are many ways around the problem you mention above; and none of the ones that come to mind have the sheer complexity of messing with the IRS. ;)

Me too, but often I can tip like that in hour 1 and swing loss on day 2. I play a little fast... Also I started out after college as a dealer so I like to make a difference, especially when on cruises where they make $5 or less a day salary.

IRS is messy and convoluted and I hope they clean their act up.

But on a brighter note I got my Fiore Suite sorted for next month, plus they doubled my comps to $200 match plays and $50 free comp dollars, and it's restaurant week! Knife & Fork here I come!

Not stating an opinion, but if you are tipping to "make a difference," why should you be able to offset tips?

Because the money I play with has been taxed already, I take it on vacation and add it to their income, which may or may not be taxed again, which then goes into the ecosystem and is taxed again at sales level.

Let me put it another way.

Taxes suck. If I pay them on income I should not pay them again when gifting taxed income to someone else.

But tipping is an instance when you don't pay taxes again. Unlike, say, gift tax over the exemption.

OK lets do a simplified example:

Salary 100K Taxed 30% Tax 30K

Take 10K in your pocket from 70K Net income to Casino for weekend.

Day 1 End with 20K in your pocket, having tipped 5K over the evening during 'hot streaks etc'
Day 2 End with 10K in your pocket.

Net Win/Loss to Casino (which reports to IRS) = 5K

IRS Then taxes 5K@30% for 1.5K

Net Annual is now $68.5K

So by tipping, you were taxed immediately, from zero upwards, with no 'gift tax exemption'.

Now, Dealer reports income to IRS of 5K for year (poor dealer) pays tax at 30% (for simplicity)

IRS Taxes Dealer $1.5K

Casino reports cap loss of $5K to IRS, they write this down against their $10K win (taxable at 30%) and save $1.5K in taxes.

So we have, from a 5K transaction:

Reported Win Tax 1.5K (Player)
Reported Loss Tax Deduction 1.5K (House)
Reported Salary Tax 1.5K (Dealer)

It is a double tap, because the house is not considering the cost of the transaction in the win/loss and I am saying dealer tip is a cost of transaction.

Simplified numbers, I know, but the concept is there.

I'm not saying the IRS isn't taxing like this. I am saying it is BS that they do!

No! You were not taxed because you tipped. You were taxed because you made 5k. What you choose to do with that 5k is immaterial to the taxation.

No.

If I had not tipped in the example above the IRS would have 1.5k less revenue from the dealer income.

So the act of tipping incurs double dipping from a tax perspective.

Look at it another way..

The casino hands you an envelope with 5K in it, and they say: inside this there are 15 $100 bills with a blue 'X' in the corner that you will have to send to the IRS.

You say thanks!

You then give the envelop to the dealer and say:

Inside this envelope are 15 $100 bills with a blue 'X' in the corner that you must give to the IRS as this is your Income Tax payment.

The IRS then receives a note from the Casino that they passed you the envelope, and the IRS asks you for 15 $100 bills with a blue 'X' in the corner.

You say, oh no, I gave them to the dealer, he is going to mail them to you lickity split... they say "oh ok cool, as long as we get our 15 bills with a blue 'X' " or they say, 'oh no sir, our tax code states that since you touched the envelope from the casino we want 15 from you and 15 from him?

Of course, they say the latter. Which is why I think this is unfair. Get it?

rofl, what do you mean, "No."? You keep changing your argument. First you argued that played tips are some type of cost that shouldn't get taxed. That's bad logic, as I already pointed out. Then you argued that a gambler gets taxed twice when tipping. That's just completely wrong, as I noted in my last post. Now you are just down to arguing that when there is an additional transaction (i.e., you tipping and contributing to a dealer's income), it's wrong for the gov to tax that income. Um, OK. The government taxing a source of income once? We can't get more anecdotal than that. That's not what people complain about when they complain about double taxation.

Glad I am keeping you amused.

- I am still arguing that point.

yeah, that is a further example of how that same money gets taxed again.

I'm cool with the government taxing that income. Just not me also. Pick one, don't tax the same money twice.

The labeling of the same 5K as winnings and as income mean the effective tax that is received by the IRS is double what they should receive from 5K.

So what's your argument? As I already pointed out, if you lose a played tip, that comes off your W/L too. There's no disparate treatment. You can't have it both ways.


And again, the problem is that it's not the same money. The IRS gets to put its hand out an additional time because there is an additional transaction. You won money playing blackjack, that's one transaction. Then you tipped the dealer, that's another transaction. They're both income which is why the IRS gets a cut. They are separate, independent actions.

Complaining about tax on these separate transactions is like complaining that you had to pay income tax on $5 that you earned at work, then when you go buy your morning coffee you have to pay sales tax on that, and the coffee company has to pay taxes on the profits, and the barista who served you has to pay taxes on his income, and then so does the coffee bean supplier etc. etc. etc. etc. That's not what people are complaining about when they complain about double taxation.

You have to understand the concept of separate transactions or you are going to get burned when the IRS thinks you're cheating them.

Once you understand this you will complain about double taxation in a whole new light.

Lets take your Barista example, keeping it super simplified:

Zero Cost of Product (I know its impossible, but it keeps the numbers clear for the example)
Sale Price $5
Salary to Barista $5
Sales tax 0%

I buy 1000 coffees in 1 year. Cost to me= $5000
The Barista earns $5000 in salary from the coffee company from the cost of the coffee
The coffee company earns income of $5000

When the IRS comes a knocking, the coffee company says 'I don't have to pay you 1.5K because I paid that to my Barista as salary, it is a cost of the transaction'.

The Barista still has to pay 1.5K, but that is it - they aren't asking the coffee company and the Barista for the money.

However when you Tip - you cannot deduct the tip, and they are asking the coffee company and the barista for the money...

Get it?

I'm not even talking about sales taxes and all that - I am saying that from me to pass money from coffee company to barista - just pass it, not profit from the transaction at all, I have to pay 1.5K?

That is unfair.

As you can see I use the term Unfair, because I am fully aware that is what the IRS wants so don't worry about my comprehension of it, I know how they are scamming us and just think it is unfair.

Think about it some more.

So basically your argument is that when people buy products from companies, the companies' employees shouldn't have to pay taxes on their wages because that's double taxation. OK. I don't think anyone needs to respond to that. Way OT on the thread already anyway.

Nice. That is what you got from all that?

The employee should pay the tax on wage, but the company shouldn't pay taxes on the income if they are already paying out the employee.

It is what we call NET profit or loss.

If they had to both pay taxes the system would be untenable, and the company would become bankrupt.

You are confused on terms again, which is why your example made no sense. I see now that when you say "income", you actually mean "revenue". These are not the same thing.

Pointedly, the government does not tax revenue.

More pointedly, this line of the thread is way way OT.

OK lets leave it at this then, you think its fine, I don't. Cheers.

I don't understand the whole premise of your complaint. In the first place, unless you are a professional gambler, you are required to keep a contemporaneous diary of all your gambling sessions. The total of all your winning sessions goes on line 21 (other income) and the total of all your losing sessions, not to exceed the total of winning sessions, goes on schedule A. The casino's win/loss statement may provide corroborating evidence, but it does not provide the necessary information to compute your tax.

In the second place, pretty much everybody figures their session win/loss net of tips that are given during the session. If you are in the habit of finishing your session, waiting for the pit boss to determine your win/loss, and then tipping a huge amount, you are doing it in the worst possible way for tax purposes.

I'm guessing that you don't keep a diary, or the issue of tipping not being included in your W/L wouldn't come up. But are you claiming that the casino keeps track of all the tips you make and adds it to their record of your W/L? That would seem like a lot of work. Usually the pit boss just writes down how much you buy in for and how much you cash out for.

QL

Here is an example that might help.

I walk to a roulette table and call:

$100 on 8, 50/50 twoway bet.

That (for the non gamblers) is $50 for me $50 for the dealer.

8 hits, I get paid $1750 plus keep the $50, I never get to see the other $1800 as it is immediately taken by the dealer.

However, The Casino states I won $3500, so I get taxed on tip.

Then the dealer pays tax on the tip.

Happened to me a lot, as I bet tips.

Here is another one.

On a cruise last year I had lost throughout, and decided that I wanted to come in and leave a nice tip regardless.

I went to 3 card poker (with some bonus bet), bet only dealer bets, all spots, $25 per spot. Cost me $600 for the tip, it was a pretty lame performance by the dealer, but she hit one payout of $625 (plus kept the winning $25)

So the guys got $650.

My tip of $650 cost the house $50, so my tip, that I could never possibly win from, as it was all the dealers, was reported by the pitboss as a win of $50.

So I now owe taxes on the $50! (which was washed out by my losses, but that wouldn't have happened if I didn't have losses)

PS I worked in a casino for 8 years as a Pit Boss and Asst Mgr. They do not calculate what you cash out, because you could slip to other people or play on other games, they count what was removed from the float during your play.

This is seldom the case in the States; for those playing below purple ($500) chips. With the exception, perhaps, of being the solitary black chip player on a $5-$25 table.

A supervisor covering 3-4 full tables has no means of keeping that type of inventory on the lower denomination ($5, $25 and $100) chips. They need to rely on the buy-in and cash out figures.

I'm still not sure why you say you owe taxes. Table game wins are not reported to the IRS (except for jackpots of 300-1 odds or longer). Even if you are the only big-chip player at the table and the pit boss is able to calculate your true result from the chip inventory, who is going to argue with you if you report your session results net of tips? While it's not spelled out in the tax code, I imagine there are very few people who voluntarily add the amount they tipped to their win/loss entry in their diary. Most people don't even keep a diary.

If you're talking about the casino year-end win/loss report, that is not given to the IRS and is not considered accurate for tax purposes.

There are many ways the tax code is unpleasant for gamblers. It seems to me like you're creating a new one where you don't need to.

QL

Yeah I know.

I worked in the states and in the UK and the tracking in the states is weaker. But in the states I play in the VIP room in the Borg when in ac which is tracked correctly due to fewer player and more experiences staff.

Or I'm playing black action with the heathens- either way I'm getting tracked 'right' which is in fact 'wrong'.

Because if I have a w4g from a 300 table win or a $1200 slot win I need paperwork to offset the win.

If I claim that my 10k in Jackpots was washed by my 10k in table losses and am audited and show supporting evidence stating my win/loss from that casino was not a loss of 10k but a win of 3k I'm in all sorts of trouble with the IRS.

Once the casino reports, I need further evidence from them to show its negated or else I have to pay.

I assume you mean W-2G. No, you don't need anything from the casino, just your diary. Casino win/loss statements are notoriously inaccurate. The IRS requires you to keep a diary in order to deduct losses. Hardly anyone does.

That being said, you need to report at least the total of all your W-2Gs on line 21 or you will get an automatic letter audit.

Yep w2 thanks for the correction. However, my interpretation of the law is that the diary alone will not suffice and will require further supporting documentation:


'It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.'

Note the second sentence here.

Fortunately, you don't have to read the tax code and guess at what it means. There's an excellent book called Tax Help for Gamblers By Chien and Scott that explains it all.

QL

If that is the case, that I can just submit my version of events in a diary with contrary proof from the w/l I'd be very pleasantly surprised. Does that book come with a guarantee that I won't lose hearing with the IRS if I just keep a diary?

You don't submit either your diary or the casino win/loss form. I highly suggest you read the book. If you're still concerned, call Marissa Chien and hire her firm to do your taxes or to represent you at an audit. But if you're talking about $3000 I don't think you're high up on the IRS's priority list.

QL

The numbers cited were examples, and I have sufficient losses, unfortunately, to eradicate the wins this year. So it is simply the principle of the matter that irks.

My issue throughout the entire thread is the way the casino reports is incorrect and that remains true.

I know I wouldn't submit at tax time, but at Audit time such things would be important.

If I have an audit I would much rather have evidence that backs up my claims properly, otherwise when I call upon a report from the casino to support my claim I then have to argue that the supporting evidence is incorrect.

It would be a lot more high percentage to have such supporting evidence actually match what you are claiming properly.

Lawyers and Accountants can make a good case, but such people are on both sides of the Audit and both rely on Evidence and Documentation to support their claim.

Well, you technically cannot deduct your tips from your gambling winnings, so in that sense if the casino report were accurate it would not help you. But they aren't accurate, even excluding the tip issue, so if I could wave a magic wand and have you stop being irked, I would. :)

QL