Taxation of Gambling Income

Do you enjoy casino? Many people find it enjoyable and relaxing to go to a casino and invest some time at the slots or tables. A big problem we see as ทดลองสล็อตเล่นฟรี accountants is that most people don’t understand how the income affect their tax return. Here are a couple of examples.

About 25 years ago a good friend of quarry called me and laughed and said her elderly parents choose to go to Wendover, NV and won $50, 000 playing a quarter slot machine game. They lived on their Social Security and had not been required to file a tax return in several years. They wanted to use the money to buy a house, you could do that 25 years ago, but were scared about how much taxes they have to pay. It turned out they made it possible to pay the tax and buy a house, but because of the added income, they had to pay taxes on their social security income, which normally would not have had to do.

Another couple I know lived in a town with several casinos. One of their past times would the casino after work. Over the course of a year, they had won $250, 000. However, they had actually spent more than their income. They both had good jobs and only one dependent. When we figured their taxes they you owe a lot of money. They couldn’t understand why they you owe so much when they spent more than they won.

It weren’t an accounting error; casino income and expenses are taxed differently than other income and expenses. Let me explain. Your income are included in your adjusted gross income, but what you spend is deducted on a Schedule A. Now, if your adjusted gross income is exorbitant, the IRS places limits on the amount you can deduct on your Schedule A and other places including medical expenses, educational costs credits, child tax credits, exemptions and employee business expenses. These rebates are limited before your casino losses are deducted. This means that even if you break even with your casino income you are going to loose valuable tax rebates, which cost even more money.

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