Why does $1200 send the alarm for the tax brigade?

Discussion in 'General Craps Discussion' started by BubbleHead, Jan 7, 2016.

  1. BubbleHead, Jan 7, 2016

    BubbleHead

    BubbleHead Member

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    Over here on the East Coast, there's a casino or two, where if you hit $1200 (or higher), on a single bet of the bubble craps machine (for example), that you'll send the squadron of red-shirts, as I refer to them, with handfuls of tax forms to give you.

    This is also the case in Las Vegas, NV.

    Why/How was $1200 decided on, as the starting point, to tax peoples' winnings. I'm just curious more than anything.
     
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  2. Bases loaded, Jan 7, 2016

    Bases loaded

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    There is a proposal to reduce it to $600!

    Its a revenue squeeze. They want to know what amount will create the income, but not drive users (gamblers) away.

    I was playing electronic craps at Monticello, 'shooting' the dice, and another player had $200 on Hard SIX. When I rolled it, he yelled, the service light went on, and his terminal was locked up. The rest of us could continue to play.

    The crazy part is I rolled another Hard SIX, but he did not get paid on that because he was tied up in 'hand pay' limbo.

    Crazy.
     
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  3. Onautopilot, Jan 7, 2016

    Onautopilot

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    It is just where the IRS decided to start the paper trail. You can deduct losses up to winning amounts, so probably most wins get reduced by those deductions....not many people end up winners at the end of the year. BUT, the trick for the IRS is that you have to report the wins on the front page as income, then take the deduction on the itemized deduction form.

    Many times this effects other minimum income deductions, such as taxes on social security....one of my big headaches! My social security is taxed to the maximum because of the W2-G's I end up with, even when I have deductions in the same amount. Crank that extra cost in with the HA, and I am probably playing at a much higher HA than advertised! I sometimes wonder why I gamble at all. :)
     
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    Last edited: Jan 7, 2016
  4. Harley, Jan 7, 2016

    Harley

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    BubbleHead - the casinos are actually doing it wrong for issuing a W-2G on the Bubble Craps :rolleyes:

    The IRS rule for reporting Gambling Winnings over $1,200 only applies to slot machines .... The Casinos have determined that Bubble Craps is not a slot machine for Player Rating purposes, so they should not treat it as such for IRS also. The Casinos call Bubble Craps skill-based game and therefore you are rated lower for comps like Video Poker and many electronic roulette machines.

    The IRS rule for a W-2G for craps is only if a single bet pays off greater than 300-1. There is no bet on the Bubble Craps that meets that IRS criteria.

    The problem is the casino wants their cake and eat it too .... Don't let them get away with it to your detriment as Onautopilot described !!
     
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  5. random_roller, Jan 7, 2016

    random_roller

    random_roller Member

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  6. Harley, Jan 7, 2016

    Harley

    Harley Member

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    LoL ... Thank you random_roller ... That was actually fun reading :confused: since I have authored a couple of books on tax as well as several articles - all I can say is what a freakin nightmare for casinos ... No wonder they can and will get it wrong !!!

    Some key language to consider:
    that is what applies to craps, not table games but the amount of odds on the wager being made. The wager odds are easily determined on Bubble Craps and therefore should apply ... Again none are above 300 to 1.

    According to the Azure table games manager in charge of "Bubble Craps", it is a table game, not a slot machine, similar to the title on his business card.
     
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  7. random_roller, Jan 7, 2016

    random_roller

    random_roller Member

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    My pleasure, Harley. I haven't read any of the public commentary for the proposed changes, some of which might be interesting. Advances in technology have greatly increased the ability to capture and report data accurately and in a time-sensitive manner.

    Any tax books I might have come across? I've got a few of them, including several by Bitker and Eustice and others published by CCH.

    BTW, you might also enjoy the link to the site below, if you don't already use it from time to time.

    http://nyulaw.libguides.com/content.php?pid=271175&sid=2508936
     
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    Last edited: Jan 7, 2016
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  8. Onautopilot, Jan 7, 2016

    Onautopilot

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    I also muddled through it. Since I always do my own taxes, any reading on the subject might help.....but since I do my taxes in purple crayon, starting at the point where I want my refund to look like, and working backwards from there.....it's usually not a problem for me. :)
     
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  9. random_roller, Jan 7, 2016

    random_roller

    random_roller Member

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    Purple crayon -- the hallmark of a true tax professional! Much better than the Sharpie I use. It's tough to write numbers in those small boxes on the tax forms with either.
     
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  10. Onautopilot, Jan 7, 2016

    Onautopilot

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    Yep, but it cuts down on the audits....the front line IRS people just look at it and say, "HU?". :)
     
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  11. basicstrategy777, Jan 7, 2016

    basicstrategy777

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    OAP....I can reduce/eliminate the taxes you pay on social security.

    Virtually all income counts toward figuring the taxes on your social security, even the interest on muni-bonds counts.

    If you reposition some of your income producing investments into an annuity....the annuity interest you earn is not counted when figuring your social security taxes. The tax savings could be significant.

    I can sell you an annuity if you would like. I'm licenced in several states. I mention this because I never want someone to say...' Gee, I would have given you the business but I didn't know you did that.'

    If you prefer to do business with someone else, that's perfectly OK. My main reason here is to give you a solution to your problem.

    I mention this so you can investigate this further, if you would like. If the ultimate goal is saving taxes on your social security income, investing in an annuity is one way to do it. The annuity would serve several purposes.....give you income that is non-taxable as it is earned, plus give you income that would not count toward your social security tax, hence, reduce/eliminate social security tax. This approach may or may not fit your needs/wants or your investment profile.

    Only here to help. No Charge.

    777
     
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  12. Onautopilot, Jan 7, 2016

    Onautopilot

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    Thanks, nice offer! I might need to look into that at some point. Actually, with the income I have that can not be repositioned, most of my social security would be taxed anyway, with or without the W-2G's. I think last year, the W-2G's just caused me maybe an extra $100 or so in taxes. But you make a great point....I'll keep it in mind!

    My post probably exaggerated the thing about social security, even though it's not a real big deal, just pisses me off how they handle the gambling winnings and deductions. :)
     
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  13. random_roller, Jan 7, 2016

    random_roller

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    Better to have a tax problem than a revenue problem.
     
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  14. basicstrategy777, Jan 7, 2016

    basicstrategy777

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    OAP.....I understand.

    Hope you win REAL BIG and have a real tax peoblem.

    777
     
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  15. Onautopilot, Jan 7, 2016

    Onautopilot

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    If / when, I do that, I'll definitely get a hold of you! :)
     
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  16. Liman

    Liman Member

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    I am not 100% sure of this, but I believe taxes in NY city begin at the 600 to 1 ratio.
    I do know in the big A, the payout kiosks only cash tickets up to 600, and generally I have to go to window to cash out my tickets, since I start with bankroll of 3-5 hundred.
    I never had anyone take any info on me while cashing out tickets in the thousands.
    I once on a ticket I think it was under 2 thousand, the cashier ask me for ID, reluctant as I was, I showed her my license, she glanced at it, didn't record anything, and paid me.
     
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  17. TDVegas, Jan 7, 2016

    TDVegas

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    I've seen bubble craps terminals get locked out as well on high payoffs. If it is not considered a slot type payout...why is there even an option to lock the machine up from Aruze Gaming. Seems odd they would install a mechanism that can be tampered with by the casino.
     
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  18. Harley, Jan 7, 2016

    Harley

    Harley Member

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    The Aruze Table Games Director expressed to me in our meeting that he did not like this casino requested option at all since it reduced play on his product !! Aruze programs the machine using each particular casino management parameters, as approved by the Gaming Commission.
     
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  19. Harley, Jan 7, 2016

    Harley

    Harley Member

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    random_roller - my tax books were not best sellers ... they were more useful as insomnia aids than anything, but it was a cool feeling when I was at a meeting in Moscow and saw my book on the PWC Partner's credenza

    Thanks for the Link ... It has been moved to my Bookmarks Bar !!
     
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  20. donald, Jan 7, 2016

    donald

    donald Member

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    The interblock organic craps machines also lock down if the payout is more than $1200. The irony is that in non bubble craps table the same bet will not require a IRS tax form. If you do not itemize, there is no way to deduct the losses from the winnings. I stopped betting horses since I was not able to deduct the losing bets from my winnings.
     
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