It’s that time of the year, the time most Americans start thinking about gathering all their receipts, W-2s and 1099s for that April tax date known as The Deadline. If you won some money in 2008 at video poker, on the slots, or at the track for example, you may wonder if the Internal Revenue Service knows or needs to know. The old pro may know the rules, but newcomers to gambling – including lottery winners, poker tournament players and even bingo aficionados –probably have some questions.
I know – you’re busy and you’ll check with a tax preparation service, Cousin Moe or the guy at the barber shop when you get time. Dangerous move, especially when you cut it too close, have a habit of forgetting or get misinformation from guessers who can get you in trouble down the line.
In honor of those procrastinators or those in the dark, several books are available to guide you in the right direction. Here’s a short list of valuable resources you may wish to refer to before signing your tax form and mailing or e-mailing it in:
The Gambler’s Guide to Taxes by Walter Lewis (159 pages, paper bound, $12.95). Published in 2003, it is subtitled How to Keep More of What You Win. The author, a certified public accountant, has prepared a step-by-step guide to help every gambler minimize tax penalties of both winning and losing. His advice is for people who play any kind of gambling games from casino offerings to pari-mutuel bettors, even sweepstakes winners. He explains the best way to report winnings and substantiate losses and outlines financial advantages of becoming a professional gambler. The book includes sample forms to become familiar with and details gaming withholding and reporting thresholds.
Tax Help for Gamblers – Poker and Other Casino Games (167 pages, paper bound, $24.95) by Jean Scott and Marissa Chien). Published in 2007, it discusses gambling wins as income; online gambling; taxes, the law, and the courts plus IRS guidelines for player record-keeping. Samples of how Scott, a co-author keeps records are reprinted. One valuable section is devoted to casino comps and gifts, plus cashback and free play followed by casino tournaments and drawings. The book points out the difference between a "recreational gambler" and a professional and covers the issues for non-U.S. citizens who are winners. There are 17 pages devoted to advice for the poker player, and information about what to do if you’re audited. Some states have withholding taxes as well on gambling winnings – the book outlines each state. A final section outlines legal precedents and offers examples of sample tax forms it’s important to know about.
Any item reviewed here is available from Gambler’s Book Shop (Gambler’s Book Club). The store’s web site is www.gamblersbook.com. You may order there using MasterCard, VISA or Discover or by phoning 1-800-522-1777.