My wife and I just returned from 6 days in Biloxi. She hit a $1200
payout on a Double Diamond 2000 slot. She also received a Federal
tax
Form W-2G (our first). The payout was less 3% MS state tax (we are
from Georgia). We usually take 4 or 5 gambling trips per year split
between Tunica, Biloxi and Las Vegas. My guestion is how best to
handle this situation with taxes (state and federal)? Are there any
special records that need to be tracked for losses?
Any help will be greatly appreciated.
In order to document your losses (and wins), you are supposed to keep
a contemporaneous (sp?) log of you session results showing when and
where you played, amount won or loss, etc. etc. Refer to the IRS tax
form instruction for further information. You are supposed to show
your winnings on the first page of the federal tax form, and then
list your losses as an itemized deduction. This answer is the short
version - in reality things can get far more complicated and there
can be unforseen consequences to both state and federal taxes when
dealing with gambling results.
As far as the 3% that was taken out for MS state tax, you can
consider that GONE. You cannot get a refund from MS no matter how
much you lose otherwise. MS considers this as a non-refundable 3%
tax on W2-G winnings. I don't know if Georgia has a state income tax
or not, but assuming that it does, you may be able to take a credit
against your state tax liability for the 3% tax that you paid to
Mississippi (i.e. it may qualify as "income tax paid to other
states"). I would advise that you consult with either a local
accountant or your state tax commission office to make sure you'll be
able to take a credit for the money MS collected.
EE
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