Taxes on tournament winnings

As the tax season is upon us I have a rookie question. Can winnings from tournaments be offset with normal gambling losses on your income tax? Do the casinos send out w2 Gs or some other documents for tournament winnings?

I appreciate any help you might have on this subject.

 

Gambling Losses can offset tourny winnings

Yes, tournament winnings can be offset by gambling losses for tax purposes, simply because I.R.S. considers tourney winnings to be gambling winnings. You can also offset any entry fees as well.

 

If you're talking about writing off winnings from paid-entry events against losses from other paid-entry events, then you certainly should be able to fade the winnings.

However, if your talking about winning $$$ in freeroll events, you might want to take another look at that advice. My brother is quite the hotshot tax guy, he tells me that I cannot write off any gambling losses against that 1099 that I'll be getting from UBT. I'd even suggested that I could enter live B&M BJT's and write off any losses from those against that UBT 1099, but he just said "Good Luck" because the IRS will consider the UBT winnings as a sweepstakes prize. It seems that the lack of an entry fee is the sticking point. :cry:

 

Hey Leftnut you want a tax deduction? Donate 1/2 of your freeroll earning to ME and I'll give you a charitable tax credit :joker:

 

Left Nut

Bet 21 does not send out 1099's.

 

Its up to you to claim it or run Im runnin :gun:

 

Just kiddin....

 

Buy ins

Our casino only taxes winnings off of a Tournament if the prize equals or exceeds 300x the original Buy-in.

 

tourn taxes

Might want to recheck with your accountant. Most tournaments give you a 1099-Misc instead of a W2-G, so you cannot use gambling losses to offset. You can deduct entry fees etc if you use schedule C or incorporate as an S corp. Of course, it's entirely up to you what you do with those that don't send a 1099.

 

Shafted in Wisconsin!

On your federal income tax form you can wash out losses against wins. My state of residence (WI) doesn't let you do that on the state tax form! I believe it's 6.5% I give them for every W-2G and or 1099.
Do any other states shaft you like that???

Billy C

 

Same Experience

My experience is the same a Ken's.

Chips

 

When we were waiting around to get paid at the Millionaire Maker tournament at the Grand a month or two ago, the girl who won the 50K first place was adamant that they use a W2G instead of a 1099 for her. She explained that she had won a large tournament at the Grand the previous year and wound up having to pay full taxes because she could not deduct any of her losses since the Grand had issued a 1099. She was very loud on that point. I don't know if that was the case or not but I do know she was determined to get a W2G.

 

Billy C The shaft as you put it is a long shaft that extends to the state of MS. The tax form has a box #16 (state tax withheld).State tax is deducted at time of issue and cannot be recovered .

 

Michigan sucks, too

Michigan does the same thing to you. Any gambling winnings are income taxable, period. I had a pretty good video poker year in the Detroit casinos in 2005 with a number of W2G's, and had to grab my ankles rather firmly when tax time came around. Plus, I got double-dipped on those taxes because the so-called increase in income significantly reduced my Homestead exemption (a property tax rebate of sorts). :flame:

 

Minnesota uses the same convention as Federal. The only exception for MN is if you fall into the Alternative Minimum Tax you cannot deduct gambling losses.

I belive Iowa uses the same convention also, unless you don't live in Iowa, then you get taxed on gambling winnings earned in the state of Iowa. Basically you calculate your tax like you lived in Iowa then calculate the percentage of your income that was actually earned in Iowa and pay that percentage of the calculated tax.

 

I Need To Move

Thanks for the responses to my post,folks.Much appreciated!I needed to vent my feelings about WI tax laws.I think it's criminal that you can't deduct losses from wins.
I believe Nevada has no state income tax, so one way to alleviate my problem is to move there, but I can't at this time for a lot of reasons.

Billy C

 

OH Canada!

We get to play BJ and poker on the internet until our fingers go numb and cash transfers to and from gambling sites to Neteller take about 48 hours. Oh, did I mention that all gambling winnings from lotteries, land based casinos and the internet are legally tax-free? If I did not live here already, I would move! LOL.:joker: :joker: :joker:

 

Not Canada!

BJ Fan,
If I do relocate it won,t be Canada. Your government has no balls!

Billy C