vpFREE2 Forums

Quarter progressives and taxes

#1

I'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.

Thanks.

Jay Fenster
Open Road Publishing
* * *
Author, Open Road's Best of Las Vegas

Updated 2008 edition now available at your favorite bookseller!

Save 25% off the cover price at Amazon.com:
http://www.amazon.com/gp/product/1593601077?ie=UTF8&tag=swinacom-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=1593601077

[Non-text portions of this message have been removed]

#2

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 <gambling@swina.com> wrote:

From: Jay Fenster <gambling@swina.com>
Subject: [vpFREE] Quarter progressives and taxes
To: vpFREE@yahoogroups.com
Date: Saturday, August 2, 2008, 9:34 PM

I'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.

Thanks.

Jay Fenster
Open Road Publishing
* * *
Author, Open Road's Best of Las Vegas

Updated 2008 edition now available at your favorite bookseller!

Save 25% off the cover price at Amazon.com:
http://www.amazon. com/gp/product/ 1593601077? ie=UTF8&tag= swinacom- 20&linkCode= as2&camp= 1789&creative= 9325&creativeASI N=1593601077

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#3

The tax side of the question is difficult to answer because of everyones varying income situations and it is impossible to answer because tax law is not finalized until after the fact (ie AMT patch last year was done at last minute)

···

--- On Sat, 8/2/08, Jay Fenster <gambling@swina.com> wrote:

From: Jay Fenster <gambling@swina.com>
Subject: [vpFREE] Quarter progressives and taxes
To: vpFREE@yahoogroups.com
Date: Saturday, August 2, 2008, 9:34 PM

I'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.

Thanks.

Jay Fenster
Open Road Publishing
* * *
Author, Open Road's Best of Las Vegas

Updated 2008 edition now available at your favorite bookseller!

Save 25% off the cover price at Amazon.com:
http://www.amazon. com/gp/product/ 1593601077? ie=UTF8&tag= swinacom- 20&linkCode= as2&camp= 1789&creative= 9325&creativeASI N=1593601077

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#4

The tax question is not that hard to figure unless Congress changes
it. If you use tax software just go back into your 2007 tax return
and add $1200 or $2000 etc. to your AGI and put an equal amount for
losses in your itemized deductions. Depending on your income a
few .25 progressives may not change your taxes at all. If your a
high roller with a high income it may cost you.

If you live in one of those silly states that do not allow you to
offset losses you should avoid W-2s.

If you have Medicare Part B and are close to the income level
requiring a higher premium then avoid W-2s. Go to
www.socialsecurity.gov to see the income limits for Medicare Part B.

If you are receiving Social Security benefits you may increase the
amount of benefits that are taxable, but that will show up when you
redo your 2007 tax return as suggested above.

Chris

--- In vpFREE@yahoogroups.com, Barton Kroeger <bartonjkroeger@...>
wrote:

The tax side of the question is difficult to answer because of

everyones varying income situations and it is impossible to answer
because tax law is not finalized until after the fact (ie AMT patch
last year was done at last minute)

From: Jay Fenster <gambling@...>
Subject: [vpFREE] Quarter progressives and taxes
To: vpFREE@yahoogroups.com
Date: Saturday, August 2, 2008, 9:34 PM

I'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.

Thanks.

Jay Fenster
Open Road Publishing
* * *
Author, Open Road's Best of Las Vegas

Updated 2008 edition now available at your favorite bookseller!

Save 25% off the cover price at Amazon.com:
http://www.amazon. com/gp/product/ 1593601077? ie=UTF8&tag=

swinacom- 20&linkCode= as2&camp= 1789&creative= 9325&creativeASI
N=1593601077

···

--- On Sat, 8/2/08, Jay Fenster <gambling@...> wrote:

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#5

Perhaps I am being naive (or "stupid"), but it is my understanding that an $1199 and a
$1200 "win" are equally "reportable" on one's federal tax form. But, either (and all) "wins"
can be "offset" with losses, duly recorded in a "log", as an itemized deduction.

..... bl

···

--- In vpFREE@yahoogroups.com, "kcace1024" <cy4873@...> wrote:

The tax question is not that hard to figure unless Congress changes
it. If you use tax software just go back into your 2007 tax return
and add $1200 or $2000 etc. to your AGI and put an equal amount for
losses in your itemized deductions. Depending on your income a
few .25 progressives may not change your taxes at all. If your a
high roller with a high income it may cost you.

If you live in one of those silly states that do not allow you to
offset losses you should avoid W-2s.

If you have Medicare Part B and are close to the income level
requiring a higher premium then avoid W-2s. Go to
www.socialsecurity.gov to see the income limits for Medicare Part B.

If you are receiving Social Security benefits you may increase the
amount of benefits that are taxable, but that will show up when you
redo your 2007 tax return as suggested above.

Chris

#6

Your understanding is correct, but "reportable" certainly does not mean
"reported."

In fact, law notwithstanding, I believe that casinos tacitly encourage
non-reporting of wins. Why else would the top award on some quarter VP
machines be $1,199?

···

On Sun, Aug 3, 2008 at 1:46 AM, bornloser1537 <bornloser1537@yahoo.com>wrote:

  Perhaps I am being naive (or "stupid"), but it is my understanding that
an $1199 and a
$1200 "win" are equally "reportable" on one's federal tax form. But, either
(and all) "wins"
can be "offset" with losses, duly recorded in a "log", as an itemized
deduction.

..... bl

[Non-text portions of this message have been removed]

#7

You are correct, all wins are reportable. The $1199 instead of $1200 just saves immediate paperwork and it is easier to show a net session amount as you take the win minus the amount to achieve it for a session net. With the paperwork jackpot you have the amount on the paper and a deduction against that which means more calculations, but in reality the tax on $1200 vs $1199 should be the difference of the tax on $1..

···

--- On Sun, 8/3/08, Jay Fenster <gambling@swina.com> wrote:
From: Jay Fenster <gambling@swina.com>
Subject: Re: [vpFREE] Re: Quarter progressives and taxes
To: vpFREE@yahoogroups.com
Date: Sunday, August 3, 2008, 2:13 AM

            Your understanding is correct, but "reportable" certainly does not mean

"reported."

In fact, law notwithstanding, I believe that casinos tacitly encourage

non-reporting of wins. Why else would the top award on some quarter VP

machines be $1,199?

On Sun, Aug 3, 2008 at 1:46 AM, bornloser1537 <bornloser1537@ yahoo.com>wrote:

  Perhaps I am being naive (or "stupid"), but it is my understanding that

an $1199 and a

$1200 "win" are equally "reportable" on one's federal tax form. But, either

(and all) "wins"

can be "offset" with losses, duly recorded in a "log", as an itemized

deduction.

..... bl

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#8

I'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.

Thanks.

Jay Fenster
Open Road Publishing
* * *

i dont know about others but the w2's are a pain! you must report
$1200 as a win. otoh if i get up 1200 in increments and then drop
back down to 600 i have a net session win of 600 which i log. the
1200 never is a concern to me or the tax man. but a 1200 w2 has to be
listed as a win. it makes no difference if i only cleared 600 in that
session. i speak of a legit session 4 hours at same machine for
instance.
it is even worse for pro parimutuel gamblers
parimutuel w2s reported at $600 and withholding after a $5000 keeps
many great handicappers cash broke as early as september depending on
their wins and bankroll until refund time. i have a close friend that
maxes out many gold cards with cash advances until he gets his up to
2 million refund in feb.or mar. needless to say jan 1st he does his
taxes and mails them jan 2. a big portion of his tax refund was his
money to begin with the govt. used his money for 3 to 15 months as
their cashflow. after 3 years in a row in the early 90's of tax
audits the irs has not messed with him since. he keeps perfect
records and knows his tax laws.
i could be missing something here, and would be very appreciative if
someone would point out my fallacy. we need to get a PAC for gamblers
and make congress better understand our perspective. my proposal of
course, is to tax only net wins in a year period minus some needed
deductions.
thanks for listening,
TD
(portions snipped below)

···

--- In vpFREE@yahoogroups.com, "Jay Fenster" <gambling@...> wrote:

#9

They make the top jackpot $1199 to keep from having to:

(1) Have someone verify the win;
(2) Have someone take your information and bring it to the back;
(3) Have someone write up a W2G;
(4) Have someone bring you the W2G;
(5) Have the machine sitting idle the entire time.

The casinos are not in the business of using resources unnecessarily. If
they can avoid doing so, they reduce their costs. They don't care one way
or another what you do on your taxes, unless failure to properly file lands
you in jail and unavailable to lose money to them!

Ken

···

On Sun, Aug 3, 2008 at 5:13 AM, Jay Fenster <gambling@swina.com> wrote:

  Your understanding is correct, but "reportable" certainly does not mean
"reported."

In fact, law notwithstanding, I believe that casinos tacitly encourage
non-reporting of wins. Why else would the top award on some quarter VP
machines be $1,199?

On Sun, Aug 3, 2008 at 1:46 AM, bornloser1537 <bornloser1537@yahoo.com<bornloser1537%40yahoo.com> > >wrote:

> Perhaps I am being naive (or "stupid"), but it is my understanding that
> an $1199 and a
> $1200 "win" are equally "reportable" on one's federal tax form. But,
either
> (and all) "wins"
> can be "offset" with losses, duly recorded in a "log", as an itemized
> deduction.
>
> ..... bl
>

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#10

it seems really inconsistent that one person can win $50,000 playing blackjack and get no W-2G (although the cash out will be reported to gov't) and a quarter VP player gets one for a $1,200 progressive jackpot payout. then again the inconsistency of tax law as applied to gambling is entirely consistent with the inconsistency and ridiculousness of the rest of the tax code.....I wouldn't expect any change to simplify things---if anything it is only going to get worse. These onerous compliance requirements are a good way for gov't to increase revenues without actually technically raising taxes. (ie Ronald Reagen UNICAP regulations--biggest tax increase in US history)

···

--- On Sun, 8/3/08, tdavenport51 <tdavenport51@yahoo.com> wrote:

From: tdavenport51 <tdavenport51@yahoo.com>
Subject: [vpFREE] Re: Quarter progressives and taxes
To: vpFREE@yahoogroups.com
Date: Sunday, August 3, 2008, 8:12 AM

--- In vpFREE@yahoogroups. com, "Jay Fenster" <gambling@.. .> wrote:

I'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.

Thanks.

Jay Fenster
Open Road Publishing
* * *

i dont know about others but the w2's are a pain! you must report
$1200 as a win. otoh if i get up 1200 in increments and then drop
back down to 600 i have a net session win of 600 which i log. the
1200 never is a concern to me or the tax man. but a 1200 w2 has to be
listed as a win. it makes no difference if i only cleared 600 in that
session. i speak of a legit session 4 hours at same machine for
instance.
it is even worse for pro parimutuel gamblers
parimutuel w2s reported at $600 and withholding after a $5000 keeps
many great handicappers cash broke as early as september depending on
their wins and bankroll until refund time. i have a close friend that
maxes out many gold cards with cash advances until he gets his up to
2 million refund in feb.or mar. needless to say jan 1st he does his
taxes and mails them jan 2. a big portion of his tax refund was his
money to begin with the govt. used his money for 3 to 15 months as
their cashflow. after 3 years in a row in the early 90's of tax
audits the irs has not messed with him since. he keeps perfect
records and knows his tax laws.
i could be missing something here, and would be very appreciative if
someone would point out my fallacy. we need to get a PAC for gamblers
and make congress better understand our perspective. my proposal of
course, is to tax only net wins in a year period minus some needed
deductions.
thanks for listening,
TD
(portions snipped below)

[Non-text portions of this message have been removed]