US Taxes on Foreigner's Winnings

US Taxes on Foreigner's Winnings

Hi, everyone. Must a foreign citizen (specifically, Polish) pay US taxes on gambling winnings, jackpots, etc.? What about taxes in Poland on US winnings? Is there a way to invest such winnings in a tax shelter; I know the standard deduction and exemption will shield roughly the first 10K of income. Or, does someone know a good source (book or lawyer) to figure out this stuff. Thanks for any leads.

Maverick - CPA: Can help if he will respond. (nt)

Winnings from tables or machines ? (nt)

US TAXES

US WINNINGS ARE SUBJECT TO US TAXES BY FILING 1040 NR(NON RESIDENT ALIEN). ANY TAXES PAID TO US AS A RESULT ARE NORMALLY ALLOWED AS A CREDIT ON THE TAX RETURN YOU FILE AS A CITIZEN OF THAT COUNTRY. THE 1040NR HAS A DIFFERENT SET OF RULES AS TO FILING REQUIREMENTS THAN THE RESIDENTS STRAIGHT 1040. GET A 1040NR AND REVIEW THE INSTRUCTIONS.

in reality

Casinos are required to withhold 28% (I think) from all non-resident non-citizen jackpots. You'd then be required to file a non-resident income tax return at the end of the year to try and get much of that money back.

Table games have no reporting requirement...so as a non-resident you can just take the money back home and never hear a peep from anyone (unless your home country taxes gambling income and decides to audit you and they find the extra income).

If I were, say Canadian, I'd just take my table game winnings home and screw the IRS. I'd also never touch a machine....with the 28% withholding, if you play a lot of machines, the IRS will have your entire bankroll before the year ends and you can file to get your refund.

Re: in truth

I probably would agree (no need to start admitting guilt here) ..

> If I were, say Canadian, I'd just take my table game winnings home and screw the IRS.

.. but I thought these conversations were to surround not what we can get away with but what is required under the law.

Were I from Poland I can tell you for a fact the IRS would never hear from me. Apparently Foreigner want's to do it right.

Poland? Are you kidding me? Were I from Ohio ........

Tourney prize paid by check

The money is from a tournament, and will be paid by check. I think I will file a W-9 form. Any ideas?

tourney prize

I know you are asking about the 'right' way of doing things.

However if I were paid a cheque that had not had ~28% deducted already, I would take it back home to Poland and cash it at one of those cheque cashing shops and lose something like 4% as opposed to 28%.

Random investigation

Table games have no reporting requirement...so as a non-resident you can just take the money back home and never hear a peep from anyone (unless your home country taxes gambling income and decides to audit you and they find the extra income).

The way it works in my country is that you will get away with it unless they decide to launch a random investigation-if they do, you are really going to get screwed. The IRS does collude effectively with foreign tax authorities. This risk is small but non-trivial. You may end up paying an emergency task rate or even an amount greater than your win if they really decide to f*ck you over. You will have a really hard time explaining your income as a gambling income also-the IRS has a small section in its handbook about doubling-up systems and the like, the tone is designed to encourage tax inspectors to be extremely sceptical about gambling winnings.

If you ever plan on going back to the US, it is really essential to do everything by the book, on a practical, rather than ethical level. I can't go into too much detail here because I discovered this while working for the tax authorities here some years ago, and am still bound by the official secrets act, so you'll have to trust me.

gambling winnings taxable in U.K.?? (nt)

if paid by check

you can cash it in the casino, you can take, say $9,500 in cash and put the rest on deposit with the casino...then draw markers for various amounts every day on the balance for play or whatever until you get all of your cash from the cage...no fees...no paperwork with anyone as long as your markers don't exceed more than 10K in a single business day.

Er...basically no

The simple answer is no.
Gambling operations themselves are taxable, so I might theoretically be charged tax if a case was made that I was effectively running a gambling business as an AP. In practice this never occurs: but it may change in the near future as the number of AP's has increased in the UK by a factor of at least a hundred. I have to mention this because I don't want other UK gamblers to think their income is completely safe from the revenue.

A week ago, I encountered such a situation. I came to the United States from Poland and won $ 5,000 and calculated how much I would have to pay tax on https://taxfyle.com/sales-tax-calculator  and it was $ 1,400, but after I was given the check, I noticed that it showed a tax of 28% that had already been paid, in addition to my winnings of 5,000. I was very pleasantly surprised, so dudes-the tax is already provided in the winnings, you win the net profit that is indicated with the tax already paid! However, I do not know if it works in the opposite direction - in Poland. So who is from the United States and won some money in the Polish casino can share this

So why have APs increased in the UK increased by a hundred?  More poker players?  Or?

FOREIGN GAMBLING ARE TAXABLE IN THE USA FOR CITIZENS AND RESIDENT ALIENS

FOREIG TAXES PAID CAN BE CREDITED AGAINST THE US TAX LIABILITY

Posted by dantaxes: FOREIGN GAMBLING ARE TAXABLE IN THE USA FOR CITIZENS AND RESIDENT ALIENS

Gambling isn't taxable in USA for alien visitors unless you win a jackpot or a price issue from a tournament, etc. YOU DO NOT PAY TAXES ON BLACKJACK WINNINGS IF YOU ARE FROM A FOREIGN COUNTRY.

We've discussed it many times, just read this thread from start to end: https://www.blackjacktheforum.com/showthread.php?43496-Cashing-out-in-US-as-a-Canadian/page4&highlight=taxes

Blackjack IS NOT TAXABLE unless canadians (or other foreign citizen) file as pros. Take the time to read the links I provided:

https://www.irs.gov/government-entit...esident-aliens
Yes. In general, withhold at a rate of 30% on gambling proceeds won in the United States if that income isn’t effectively connected with a U.S. trade or business and isn’t exempted by treaty. Also, no withholding is required on nonbusiness gambling income from Blackjack, Baccarat, Craps, Roulette, or Big 6 Wheel.

https://www.irs.gov/government-entit...tribal-members
Unless specifically excluded by treaty, Tribal governments paying gambling winnings to nonresident alien individuals, or nonresident alien tribal members, would use Form 1042-S, Foreign Person's U. S. Source Income Subject to Withholding, to report the distributions. Winnings paid to a nonresident alien from blackjack, baccarat, craps, roulette, or big-6 wheel are excluded from the reporting requirement.

https://www.irs.gov/individuals/inte...on-form-1042-s
Amounts NOT subject to withholding under chapter 3:
•Portfolio interest paid on obligations that meet certain requirements.
•Bank deposit interest that is not effectively connected with the conduct of a U.S. trade or business.
•Original issue discount on certain short- term obligations.
•Nonbusiness gambling income of a nonresident alien playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States.
•Amounts paid as part of the purchase price of an obligation sold between interest payment dates.
•Original issue discount paid on the sale of an obligation other than a redemption.
•Insurance premiums paid on a contract issued by a foreign insurer.

 

Great, comprehensive post. All non-U.S. citizens should print this out and safe it for future reference.

Don

I refer to it so often for others that I bookmarked it on my browser :-)