If you gamble in New Orleans and had LA state tax taken out but are not a
resident, don't forget to download the non-resident tax form from Louisiana
website and file a return. Their return is a bit complicated, but you
should be able to get quite a bit of the taxes they took back. I was quite
pleased to do my calculations and get back about $8000 of $8600 in taxes
taken!! Forced savings!! (Though as usual I'm a loser overall, I had quite a
few W2Gs in LA this year).
Be sure to figure out your Federal return first, since LA's return requires
this information to fill it out.
ยทยทยท
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If you deduct amounts taken for LA tax from your return in one year, and
get some of that returned in the next calendar year, you must report what you
get back as income the next year.
If you don't deduct the LA tax in year 1, you don't need to report it as
income in year 2.
For most people deducting could be a good idea. If your Adjusted Gross
income reaches the point where you lose some of your deductions, you may not
want to do the deduction/addition process.
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Federal --
Since it is tax time again, it is once again time to remind everyone
(though few take this advice), keep a contemporary gaming diary of your winnings
and losings, in case you are ever audited. You can find out more about
this on the IRS website, but basically you should record information such as
name of casino, each machine number, time into the machine, time out of
machine, money put in, money put out, any W2s received.
Many people rely on the win/loss statements as proof of gaming losses, but
in actuality, the IRS sometimes has disputed this (I have found these
win/loss statements are sometimes inaccurate myself). Recently a friend
mentioned he was having a problem with an audit where the IRS said, "where is your
gambling diary?" and things weren't going well.
So having both the diary and the win/loss statements may be crucial, if an
audit ever comes down to that point.
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Federal --
If you have large gambling wins, you may find it convenient to do an
Estimated Tax form each year and send in extra tax money as estimated taxes.
You can also request a casino to take a portion of your wins out as taxes and
send that directly to the IRS. If you want to do this - request this
BEFORE they hand you any money. Secondly, keep a record of what you've done, so
you can isolate that particular W2G that shows that tax was withheld,
since you will need to send a copy of that W2G along with your tax form.
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The biggest pain for me each tax time is how unfair the system is. I keep
losing money every year, but I get a huge number of W2Gs since I'm playing
$1 and up machines and often multiline machines. This pushes up my
Adjusted Gross Income, since I can't deduct the losses until Schedule B. As a
result, the amount of deductions is reduced a bit, and exemptions are
reduced, and on top of that, my husband's Medicare cost is increased.
Since I never seem to have any profits, I can't file under Schedule C
either (you have to have a profit in 3 of 5 years to be a "business" as well as
qualify under other conditions which our gambling might or might not meet).
Someone (Senator Reid, where are you??) (Casinos where are you??) really
needs to change the tax code, now that inflation has pushed so many people
into getting W2Gs. The paperwork burden is huge on casinos, and now on us
citizens. The tax code re gambling is confusing (and a lot unwritten). And
it is truly extremely unfair not to allow citizens to deduct losses from
wins first. But instead even though you can be a net loser for gambling,
you can end up paying higher Federal income taxes and Medicare taxes which is
truly unfair.
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sigh....
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