12b. Re: Quarter progressives and taxes
Date: Sat Aug 2, 2008 8:38 pm ((PDT))
While the answers below are correct (as far as I know, I'm not a tax prof.), they do not relate to whether the gambling income did or did not include income that generated a W2G. The income is taxable regardless.
As I've posted before (and as have others), if you file honestly, and any of your gambling income is subject to state GROSS income tax (does not allow losses to offset winnings), VP is not a positive game, after-tax, unless you are able to bypass those gross income laws by being a professional gambler (which, again, I'm not an expert on).
If you are not filing honestly, and are under-reporting your gambling income dependent on whether or not it generate W2Gs, and they catch you and can prove it, your exposure is probably serious with regard to criminal offense of not reporting income. I certainly understand that many people do this. I drive over the speed limit sometimes, but I know I might get a ticket, or worse -- those who under-report their income should consider whether the risk-benefit justifies it for their particular circumstances and beliefs.
--BG
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If you itemize you should be tracking your losses and deducting pretty close to
your wins on Schedule A. Your AGI will be higher though and this could possibly
cost you various credits, a lot of which phase out between $110K-$120K and some
$150K-$160K of AGI for someone married filing jointly. For example if your
non-gambling AGI is $148,000 and you have W-2 G's totaling $12,000, even though
you deduct $12,000 on Schedule A, your AGI will still cause you to lose the
ability to do a Roth IRA, if you are pushed over $110,000 you will start to lose
the Child Tax Credit.--- On Sat, 8/2/08, Jay Fenster wrote:
From: Jay Fenster
Subject: [vpFREE] Quarter progressives and taxes
To: vpFREE@yahoogroups.com
Date: Saturday, August 2, 2008, 9:34 PMI'm always hesitant to play quarter progressives once they cross the W2G
threshold as a general rule. But I'm always tempted.How do you calculate the effect of the income tax hit on EV and determine
the point at which the jackpot is big enough to offset it?I'm talking about full-pay Jacks, Deuces and Double Bonus specifically, if
that makes any difference.