Want to know the secrets of preparing for a "monster roll?"
Let’s say you are playing craps and the monster roll finally arrives, and you are at the beginning of it. You start with a $10 pass line bet, two $10 come bets with maximum odds, and then keep increasing your bets by one unit when you win.
You plan to decrease your bets when you lose but that never happens — the shooter keeps rolling numbers — and finally after he makes his tenth point, he sevens out.
But then the next shooter does the same thing! Your red chips turn to green and your green chips to black.
At the end of two hours, you count your chips and find that you have $3,500. You’re on top of the world. Think of what you can do with the money, $3,500 tax free!
Or is it?
Want to know how the pros minimize their taxes on their gambling wins?
Let’s find out!
You are technically required to report any gambling wins as income to the IRS. All casinos have a policy paper on taxes, which is available free of charge at the casino cage. If you do opt to report your big win as income in exchange for not having to worry about it for the next seven years, there is an easy way to minimize your taxes.
The first thing to do is start now, preparing for your big win. You have to keep accurate records of all of your play and all of your wins and losses.
If you played many times this year and lost a total of $2,500, you can deduct that from your previously mentioned $3,500 win and only pay taxes on $1,000.
If you are in the 20 percent tax bracket, you would have paid $700 in taxes on your $3,500 win. On $1,000 you only have to pay $200 (20% of $1,000 is $200).
This means that by keeping accurate records, you’ve saved at least $500 ($700-$200) this one time alone.
To balance your wins with your losses, you need to keep an accurate diary. Your total losses on blackjack, slot machines and roulette can balance out one big win on craps. If you get audited, you need to have records to support your diary — markers, withdrawal receipts, bank statements, travel documents and anything else you think will help support your claims.
This might seem like a great deal of trouble but if you really expect to win big when you gamble, you should be prepared for it.
Keep accurate records and you’ll also keep more of your winnings in your pocket, so when that monster roll finally comes along, you’ll really be ready for it.
Now, you know the secrets of minimizing your taxes on your gambling wins.