Anyone here play Europe? If you do, I would like some advice on how the taxes on winnings work. I'm planning a trip later this year, and I would hate to get busted on a tax evasion from somewhere in Europe...lol. Anyone got any advice?
Thanks.
PD
Europeans are not taxed on gambling income. However, USA residents are taxed on their worldwide gambling income. shark
They may not be taxed on point of impact. eg I know in America, jackpots over a certain level are taxed, but there is still an obligation to report gaming winnings in other countries & volunteer tax if gaming is your primary income.
Where it gets interesting: If Mr. Martingale & Mr. Shrewd buys shares, the former loses & the latter wins, they may post their respective loss & win at the end of the financial year, as the tax dept. readily accepts they were engaged in a business activity, ie both were involved in trying to make a profit.
Now if this pair turn up at the casino, & Mr.Martingale loses his shirt following a system of his own namesake, & Mr. Shrewd wins using a better system, the taxman won't acknowledge Mr.Martingale's loss, but is happy to take a piece of Mr.Shrewd's action.
Think about it. Both men went to the casino & followed a system. If the winner has tax liability, why doesn't the loser have a legitimate claim for his loss. Who's to say how much the winner won anyway, or even if that can be established, his other losses?
I don't know any pro's who pay tax, & I don't know any who have been prosecuted. I believe a prosecution could lead the way to a fight in the higher courts which the Gov't would not want to entertain, ie some radical judge who's about to retire, will allow the Gov't to enforce their tax on the miniscule no. of pros, & rule in favour of losers claiming their losses. Don't think it can't happen. Years ago a higher court in my land ruled that people could claim monetary costs against the police where police lost the case. The Gov't got it ovveruled, but not before many months & many millions of dollars were expended.
What I do believe is that if you claim unemployment benefits & it can be shown you're living the life of Riley, fraud charges could be laid against you. Besides this is pretty f*&^ed, if you're a pro you should have more productive things to do than wait in queues & turn up at job interviews. If you're struggling, maybe.
Mr Shrewd would be wise to have other assets such as property & pay the tax on his profits, so as to make a societal contributon, charities could use a little help also if you feel guilty.
I would be interested in hearing other, perhaps more learned opinions. I went to an accountant & he stated if I volunteered tax as a pro gambler I would probably get audited!
Luckily I don't have to worry as my wife & I earned a high income for many years prior to gambling, so we can legitimise our assets. We no longer live on baked beans & pay off the mortgage with the money we stuffed into our mattress over the last ten years. "The truth, Your Honour, may I be struck by lightning if a lie ever passed these lips."
after talking to a few accountants,the govt doesnt want you to file as a pro gambler.you claim your gambling income on the Other Income line(i think 21) of the 1040.i was told if you file as a pro gambler you have to have a business license and its a big hassle.
But you are right, tax laws on gambling are unfair and insane.
anyone who puts in a significant amount of hours gambling and runs it like a business can file Schedule C and file as a professional gambler. (No business license required) You simply have to meet the same requrements that any other business must meet (or your gambling then is considered a hobby)
taxing a gambling income creates too many hassles....
id think the only reason they bothered in the US is because of the infinite number of casinos there....much bigger industry
(note australia is the capital of machines....the govt probally makes enough off those alone)
The tax you owe on your winnings is to the country you live in. Regardless of where you MAKE your money, you owe US income tax. It is misleading, at least to the uninformed, when a casino advertises "tax free". They are only referring to local taxes.
Becky
Thanks to everyone for the help. It's a relief to know I won't have to pay other governments for what I worked so hard for...bad enough the Infernal Revenue Serveice wants to wet its beak.
Now, one more question. Does anyone know of any good accounting firms that can handle the tax issues with gambling, or should just a trip to H&R Block handle it? Here's a neat twist, that I hope is a non-issue: I'm moving from one state without legal gambling to Illinois. Any idea if this will cause me to need an accountant in one state, and another in the other? Or is the federal gov't the only bunch of jackals after my gambling earnings?
Thanks again, everyone.
PD
