Other Types of Gambling. The winnings of these are also taxed at 25 percent. Similar to gifts, if you win a non-cash item such as a car, you must report the value of the car as earnings. For example, if you win a new $20,000 car, you will owe $5,000 in taxes on that vehicle to the federal government. So in the long run you are being double taxed. My turbo tax Illinois state program did not warn me of this situation and thus I was not hit with taxes but late fees etc. The letter says they do not allow a credit for taxes paid on gambling winnings in another state. I believe the program should let you know this.
Wed, Jun 27, 8:10pm by William Brown
Last Updated Wed, Jan 8, 7:06am
Australia has one of the highest rates of gambling in the world, with more than 80 per cent of Australian adults engaging in gambling of some kind. This includes four per cent of the adult population who play poker machines once a week. Traditionally, gambling has been legislated at a state and territory level, rather than by the federal government. There are numerous Acts in each region that outline information about gambling tax laws and regulations.
Taxes On Online Gambling
History of Gambling Tax Legislature
In Australia, the winnings from gambling are not taxed. This is for three reasons.
Gambling is not recognised as a profession in Australia. It is regarded as a hobby or recreational activity. The Australian government has come to an agreement that the gains from gambling activities are often the result of good luck, not hard work.
Even if someone wins big, many people also lose a lot in other gambling sessions. Skilled professional gamblers, such as poker players, who could argue their winnings are the result or skill instead of luck, haven’t been asked by the government to pay taxes on their winnings.
If the player decided to register themselves as a business though, they might be required to pay tax. If the player received sponsorships, endorsements and other gains because of their professional gambling career, then this would be taxable.
Who Pays The Gambling Tax in Australia?
The main reason behind the lack of taxation on gambling winnings is that the gambling operators are taxed instead. This taxation differs between the regions.
There are taxes on the turnover amount, on player loss and on net profit. As such, gambling operators need to obtain a license to offer their services, with certain fees paid during the development of the operation. The operators’ requirements to pay tax differ based on where they are operating and what form of gambling is offered.
For example, in the state of New South Wales, tax on electronic gaming machines in casinos is between 16.41-38.91 per cent of gross revenue, depending on the gross revenue.
This is different to the state of Victoria, where the tax is 31.57-51.57 per cent of gross gaming venue.
What are the Online Gambling Tax Rules in Australia?
In Australia, the Interactive Gambling Act (2001) governs the rules and laws about online gambling. This is a national law and was passed by the Australian Parliament on June 28, 2001. The Act is targeted at online gambling operators, making it an offense for them to offer ‘real-money’ online interactive gambling to residents in Australia.
That hasn’t done much to stop Australian’s spending big online, with $800 million spent by 2010. Accessing and using interactive gambling services is not an offence in Australia. It is also permitted for companies based in Australia to offer their services to gamblers located outside Australia, with the exception of those countries that were called ‘designated countries’. Australian punters benefit from not having to pay tax on their gambling winners, but when online gaming is concerned, there aren’t many Australian providers.
Since few are based in Australia, there is a foreign transaction fee that users will have to pay to make a deposit or withdrawal. This is dependent on what kind of banking method you use.
For example, Mastercard and Visa will always charge a foreign transaction fee, whereas Skrill, won’t charge one. There is also the issue of currency conversion to be aware of and some of the best casinos available might not offer the option to play in the Australian dollar.
Do Players Have to Pay Any Gambling Tax in Australia?
In Australia, it is the gambling operators that are charged tax, not the players. The amount of tax the operators pay depends on the type of game and the location of the poker machines or casinos.
There is no tax to pay for online Australian players either, despite a few online Australian casinos in operation.
The only fees or charges a player might encounter when playing an online casino could be fees to withdraw or deposit money into international casino sites or when converting the Australian dollar into the website’s preferred currency.
- Factoid: Twenty-five years ago 2 states had legalized gambling and 48 did not. Now 48 do and only 2 do not (Hawaii and Utah.)
- Factoid: Nevada gambling revenue was $1 billion in 1975 ...$10 billion in 2004 and is projected to be $15 billion in 2009.
'Las Vegas was built for people who are really bad at math....' ...Penn Jillette (Penn & Teller, now at the Rio!)
'There are two times in a man's life when he should not speculate: when he can't afford it and when he can.' ...Samuel Clemens, also known as 'Mark Twain' (1835-1910)
In the last decade, entertainment, shopping and fine dining have replaced gambling as the top attraction for visitors to Las Vegas. Many hotels get more than half of their revenue from non-gambling sources.
Although tourists no longer list gambling as the primary reason for their visit, almost all are willing to risk an average of $500 each trying to hit that elusive jackpot.
Nationwide, casino gambling is a $50 billion business. And 20 percent of that amount comes from just one state ...Nevada. One third of all Nevada general tax revenue comes from state gambling taxes.
Do You Have To Pay Taxes On Online Casino Winnings
The state of Nevada and casinos like to call it “gaming” since ”gambling” has such an negative ring to it. We agree. “Gaming” is a better word for the games of chance legally offered in Las Vegas. Games are played for entertainment. And this is how you should treat the money you risk in Las Vegas in hopes of hitting “The Big One.” Play for fun and the “possibility” that you might win. NEVER take Las Vegas gambling seriously.
Gambling laws in NevadaLas Vegas gambling was legalized in 1931. The Nevada Gaming Commission and Control Board develops and administers all gaming regulations. Their website can make interesting reading. Casinos with more than 15 slot machines pay an annual tax of $250 on each one. There is also an additional monthly tax of up to 6.75% on gross gaming revenue ...a percentage that is the lowest in the U.S.
Anyone working as a gaming employee must be registered with the state and have a valid gaming work permit. This includes all casino workers except bartenders and cocktail waitresses.
You must be 21 to enter a casino, gamble ...or purchase or consume alcoholic beverages. If you look young carry a state-issued ID with photograph such as a driver’s license. Children are permitted in the casino public walkways but are not allowed to be near slot machines or gaming tables. You are allowed to carry open alcoholic beverage containers on the street, but not in a vehicle.
Taxes on gambling winningsThere are some things you should know if you are lucky enough to win. The Internal Revenue Service (IRS) requires all casinos in certain instances to withhold federal taxes if you win over a certain amount. The percentage withheld ranges between 25 and 30 percent depending on how you won. Here is how it works.
If you had gambling winnings, the casino is required by the IRS Information Reporting rules to withhold 28% as income tax if you do not provide a documented TIN (Taxpayer Identification Number, that is, your Social Security Number.) We have heard of cases where it is withheld no matter what. The withholding tax is 30% if a foreign gambler. The tax rate is 25 percent if the amount is over $5,000 (except for non-resident aliens.)
When your winnings exceed a specified threshold and/or tax is withheld, the casino will give you an IRS Form W-2G showing the amount you won and the amount of tax withheld. Report (and take credit for the tax you paid) on your IRS Form 1040 tax return at the end of the year. (Only use Form 1040 if you had gambling winnings; you cannot use any other form.)
Taxes On Online Gambling Winnings
Generally, gambling winnings are reportable to the IRS if the amount paid is (a) $600 or more and (b) at least 300 times the amount of the wager. This requirement primarily applies to lotteries, sweepstakes and other big winnings from small bets. It does not apply to winnings from bingo, keno, and slot machines.
Casinos report gambling winnings for these games to the IRS when a player wins $1,200 or more from a bingo game or slot machine or if the proceeds are $1,500 or more from a keno game. When you exceed these amounts, the casino may withhold taxes and will provide you with IRS Form W-2G. They keep the original and give you two copies of the form. (If state income tax withholding is required on gambling winnings in your state, additional taxes may be withheld.)
The rules are different for table games (such as blackjack, baccarat, craps, roulette or other spinning wheel games.) Since Nevada casinos do not know the amount you started with, they are not able to determine how much you won (...your taxable gain.) As a result, federal law provides that there is no withholding or even reporting of table game wins to the IRS. It therefore follows that table game winners probably do not report their gambling profits to the IRS.
You not only pay taxes on gambling profits, but you can also claim gambling losses as an itemized deduction as well. But you must keep some kind of documentation (such as a diary or tickets) to substantiate the amount and nature of the losses. In any event, you cannot claim gambling losses that exceed your winnings.
Managing your moneyGreed is the downfall of most players. The odds that you will win if you play long enough is statistically wrong ...as is; having doubled your money, you next try to quadruple the winnings (and end up losing it all.) Both concepts have built a lot of nice hotel-casinos in Las Vegas.
My system for managing gambling money is simple. I budget $100 a day which, according to statistics, is about average for Las Vegas visitors. If I am on a five day vacation, I put $100 in each of five dated envelopes ...a total of $500. I ration the money throughout the day and stop when I lose my hundred and do other things. I might stop when I double my allotment. In any event at the end of the day, I either am ahead or behind. If I am ahead, I put whatever portion of the $100 I have left (hopefully it is more than $100) back in the same dated envelope and place it in the room safe that hotels provide. Tomorrow I play with the money in following day’s envelope. The most you can lose is $100 on any given day ...or $500 for your trip. I am happy if I break even ...and you should be too. Once in a while I go home with “their” money. In recent years I have done better. I will tell you how later.
The bad news: There are no casino games or bets where the house does not have a clear advantage. The odds either favor the house ...or they get a commission. And if you are not familiar with basic information about the games you play or bets you make, you are just about a guaranteed loser. In short, casino owners are in business to make a profit. They did not build all those gorgeous hotels by giving away money.
The good news: The reality is that if you are lucky you can win ...and the drinks are free. But statistically the chances are against winning. So the cardinal rule is, over the long haul, whether playing the slots, table games, betting on sports or risking money on anything; you will probably lose. But some bets are better than others.
It is beyond the scope of this website to provide in depth strategy on how to gamble and win in Las Vegas. Many books have been written on the subject and - trust me - none work over the long haul ...or are illegal.Do You Pay Taxes On Online Gambling Winnings For 2017
We will, however, cover the most popular games and things you should know as a beginner to have fun and minimize your loss ...and maybe make a few bucks.
Let the games beginBlackjack (21) is either dealt by hand with one or two decks. Multiple Deck 21 is dealt from a box called “the shoe.” Everyone in Blackjack plays against the dealer. Roulette consists of a spinning wheel marked with numbers 1 through 36 (18 red, 18 black) and American Roulette has a green 0 and 00 ..a total of 38 possibilities. You win if your number, combination of numbers or color comes up. To play Keno, you select a minimum of 4 but no more than 10 numbers on a ticket between 1 and 80. Twenty of the 80 numbered balls are drawn and you win if all your selected numbers are chosen. Craps is a complicated dice game which we do not recommend for first-timers. There are many other table games (and variations) as well. More and more people are playing poker these days and we will also have a little to say about that later.
Pay Taxes On Online Gambling Winnings
By far, however, the most prevalent pastime in Las Vegas is playing the slot machines ...and video poker. We will cover the games of chance and sports betting in this chapter ...which you should play, where you should play and the odds of winning.
NEXT PAGE: 10.2 SLOT MACHINES ...AND VIDEO POKER... ⇨