Tax Help for Gamblers

Many of you are starting to work on your 2016 tax returns and have questions about how to handle your gambling figures for the year. If you are a new gambler and/or have gotten some W-2Gs for the first time, you need a lot of basic information. This is why Tax Help for Gamblers was written. It will give you and/or your tax preparer valuable details you need as you work on your returns, including both federal and state for many of you.

If you are experienced in handling gambling figures on tax returns and/or you have heard about the recent IRS ruling, you may have specific questions about possible changes for 2016. Here is the actual 25-page IRS document discussing the regulations proposed earlier – and many vehemently protested by both casinos and players – and why or why not they made it into the final document.  Fortunately, the most problematic for gamblers, lowering the W-2G issuance from $1200 to $600, was scrapped.

Unfortunately the one issue we players wanted settled, specifically approving the “session method” of reporting our wins/losses did not make it into this final document; the IRS stated it is still “considering” Notice 2015-21, which would give a “safe harbor” for this logical method.

Therefore, we cannot yet change the advice we give in the latest edition of Tax Help for Gambler. In the section titled “1040, Line 21 Problem” (which may now be a different line!) we discuss at length this problem of deciding what a “session” is and whether the IRS will kick out your return if you use it instead of your W-2G total. Although there have been an IRS memo and a court ruling validating this method – and many have been using it with no problems – there have still been many cases where gamblers have had to endure much back-and-forth argument and even needed professional advocating before they could prevail. Some gamblers just deathly fear the hassle and won’t use the method even if it would be the most cost effective. So we all hope that the IRS will soon put out a clear directive on this issue.

Another resource I can recommend is a recent good article by my friend Mark Gruetze that discusses IRS and tax issues for gamblers.

The latest edition of Tax Help for Gamblers is available only as an eBook but is immediately accessible to download for a very frugal price – $7.99. It can be ordered through iTunes, for the Kindle and for the Nook.