your primary occupation, your filing of Schedule C has to meet the same requrements that other businesses must meet. Your gambling can be a legitimate side business (say you are a school teacher for 9 months and during the summer you're a Video Poker and Blackjack player) Being a teacher as your primary profession doesn't automatically disqualify you from filing Schedule C as long as your schedule C meets all the standard requirements.
You are required to keep "reasonable" records of your playing "sessions". If you sit down at a BJ table at 5:00 PM and play until 6:00 PM and have a net win of $100, that is "one" session. So you record in a notebook: BJ, Casino xyz, table #, date, win $100.
You are required to keep "reasonable" records of your playing "sessions". If you sit down at a BJ table at 5:00 PM and play until 6:00 PM and have a net win of $100, that is "one" session. So you record in a notebook: BJ, Casino xyz, table #, date, win $100.
So if I had switched tables after half an hour, winning $150 at table #1 and losing $50 at table #2, I actually won $150, not $100. Similarly, if I got up to stretch my legs every 15 minutes and my quarter-hour "session" results were +$50, -$25, +$100, -$25, I actually earned $150. This despite the fact that in all scenarios I walked away with $100 more in my pocket.
As a consequence of not being able to offset wins and losses, your "income" increases monotonically with the accuracy of your records. So you see the definition of "reasonable" becomes very important.
"There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one 'makes' them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted-and you create a nation of law-breakers-and then you cash in on the guilt." -- Ayn Rand, Atlas Shrugged
So if I had switched tables after half an hour, winning $150 at table #1 and losing $50 at table #2, I actually won $150, not $100.
Correct. It's your buy-in's and cash outs that count. Getting up and stretching your legs doesn't count as the end of a session if you stay at the same table.
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Mississippi changed their tax laws for 2002 (and beyond) they now withhold 3% and it is completely non-refundable (no matter what tax bracket you are in or whether you're a net winnner or loser).
The good news is that all other gambling winnings (from table games for example) that don't generate W2-G's are now non-taxable in Mississippi.
I have read most of the posts here and even though my question doesn't pertain to casino gambling I thought perhaps some of you could put my mind at ease. I have heard that the IRS will take out 28% on the spot if a person wins $5,000 or more in a single horse race. Is that true? If it is, that amounts to $1400.00. Here's my question: If I itemize and if I can show losses leading up to that win that show I only made $200 profit on the winning race and only really owe $56(28%) will the IRS refund me back the difference of $1344.00 the following year? It seems to good to be true. Punter 54
If you give the IRS too much money during the course of the year, they will refund the difference back to you. If you can show that your tax obligation was less than the amount you have given, then you are entitled to a refund. Just show your losses on your return so you can adjust that figure. If you are knowledgeable enough to determine that year's tax obligation, you can adjust your W-4 forms at work to lower the amount of tax taken out on your regular paycheck so that you can get your money back sooner. Remember, the IRS doesn't pay you interest when they hold your money for you.
Actually, they do pay interest if they hold the money back because they question your tax statements.
A few years ago, my return got lost somewhere after I mailed it. Due to some major trouble at the time, I never noticed that they hadn't sent me my refund check (it was only a few bucks anyway). The next year I was due a huge refund, and they refused to return it until I cleared up the earlier year. They paid a very good interest rate on the money after everything got straightened out (which they then forced me to pay taxes on the year after that).
