Gambling Losses Under New Tax Law

1. Gambling Losses Under New Tax Law
2. Gambling Losses Under New Tax Law

Gambling income, losses fall under income tax law

'Under current law, a taxpayer may claim an itemized deduction for losses from gambling, but only to the extent of gambling winnings,' states the technical explanation on the GOP tax reform. Gambling losses are deductible only to the extent of gambling winnings and are reported as itemized deductions on Schedule A that are not subject to the 2%-of-adjusted-gross-income threshold; therefore, deductions for gambling losses are not among the miscellaneous itemized deductions suspended by the Tax Cuts and Jobs Act of 2017 (TCJA).

With the recent opening of CityCenter, many of you may be planning a trip to Las Vegas with hopes of striking it rich. But did you know that all gambling winnings—legal or illegal—should be included in your gross income, subject to income tax? Did you also know about a significant change to Hawaii law related to gambling losses?

Gambling winnings

For federal income tax returns, all gambling winnings are reported as ';other income'; on your Form 1040. Gambling income includes, but is not limited to, winnings from lotteries, raffles, house races and casinos. It includes both cash winnings and the fair market value of prizes such as cars and trips, which must be reported on your return even if your losses are greater than your winnings for the year.

Gambling winnings of $600 or more and at least 300 times the amount of the wager generally will be reported to you on Form W-2G. The reporting threshold is $1,500 for Keno and $1,200 for bingo and slot machines. When winnings exceed $5,000, income tax is generally withheld and credited against tax due on your tax return. Please keep in mind that gambling winnings are included in gross income regardless of whether it is subject to withholding.

Gambling losses

For nonprofessional gamblers, gambling losses are deductible as an itemized deduction on Schedule A of your federal income tax return. This means that if you elect to take the standard deduction (rather than itemizing), you may not deduct gambling losses. You also cannot deduct more gambling losses than the amount of your winnings. You must report the full amount of your winnings as income and claim your losses as an itemized deduction.

Gambling losses do not include expenses used to engage in wagering (such as travel, meals and lodging).

To deduct your losses, you must be able to provide receipts, tickets, canceled checks, statements or other records showing the amount of winnings and losses. The IRS also requires that you keep a record of your winnings and losses, listing the date and type of wager or activity, name and location of the gambling establishment, people present with you, and the amounts won or lost.

Changes to Hawaii law

On July 31 Gov. Linda Lingle signed into law Act 165, which disallows taxpayers from claiming gambling losses on their Hawaii returns. So while all gambling winnings must be reported as income, you are no longer allowed to deduct gambling losses on your Hawaii income tax return. The law applies to any losses beginning Jan. 1, 2009.

Let's say in 2009 you won a total of $1,000 and had $1,200 of well-documented gambling losses. You would need to report the $1,000 of gambling income and deduct $1,000 of your gambling losses as an itemized deduction on your 2009 federal income tax return. The remaining $200 in gambling losses cannot be deducted. However, on your Hawaii tax return, you cannot deduct any of the $1,200 in the gambling losses, and you will be taxed on the $1,000 in winnings. Asda recurring slot disappeared bonus.

Located just off the main casino floor on Level 1, the lounge offers 17 classic Las Vegas table games with minimum bets of $100, including baccarat, mini-baccarat, single-zero roulette and blackjack. The intimate, luxurious space features contemporary sculptures, glimmering chandeliers and a high-end audio system, creating a refined gaming environment unlike anything else on the Las Vegas Strip. Roulette is also available at The Cosmo. You can typically find up to six tables, with bet limits ranging between $15-$500. Single-Zero roulette can be found on The Cosmo's casino floor as well. Meaning that players receive half of the original wager back on even money bets if zero is called. Other Table Games at The Cosmopolitan – Casino War ($15 minimum). Cosmopolitan roulette minimum limit. The minimum bet is 25 dollars while the maximum is 10,000 dollars. Roulette and Craps The Cosmopolitan Las Vegas also offers roulette, and you can find up to 6 tables with bet limits that range between $15 and $500.

With the beginning of the new year, now is a perfect time to remember that while gambling can be exciting and enjoyable, you should be mindful of the change in Hawaii law and take note of all your winnings and losses and keep as many receipts as you can.

';Tax Tips'; appears every other Sunday during tax season. Amy Sugihara is a tax senior associate in the Honolulu office of Grant Thornton LLP. She can be reached at .(JavaScript must be enabled to view this email address).

The Tax Cuts and Jobs Act of 2017 (TCJA), which was passed into law in December 2017, took effect on Jan. 1, 2018. TCJA's passage has resulted in the loss of three important tax deductions that are affecting individual tax returns.

This column discusses these lost deductions and how they may affect federal employees as they prepare their 2018 federal tax returns.

The first deduction discussed is the deduction for casualty and theft losses. Until 2018, personal casualty and theft losses were deductible as part of one's itemized deductions. But for the years 2018 -2025 when TCJA is in effect, personal casualty and theft losses are not deductible unless these losses are incurred in a federally declared disaster or, if an individual has a personal casualty gain, to the extent of such gain. The gain is therefore 'netted out' by this casualty loss and no capital gain taxes are paid. Personal casualty losses that are potentially deductible are reported on IRS Form 4684 (Casualty and Theft Losses, Part A).

What is a federally declared disaster?

A federally declared disaster is a disaster that occurred in an area directed by the President to be eligible for federal assistance. An ongoing list of federally declared disasters is available on the Federal Emergency Management Agency (FEMA) web site at www.fema.gov.

A loss to personal use property is deductible if the loss is due to fire, storm, shipwreck, or other casualty. A casualty is the damage, destruction or loss resulting from a sudden, unexpected, or unusual identifiable event. The casualty loss must be reduced by actual insurance reimbursement and by any expected reimbursement. If the property is covered by insurance, an insurance claim must be filed. Otherwise the casualty loss is not allowed.

An example of a potentially deductible casualty loss is the loss of a home located in the areas affected by the California wildfires that occurred in the fall of 2018.

Miscellaneous itemized deductions

The second deduction that is not available for tax years 2018 -2025 under the TCJA is miscellaneous itemized deductions exceeding 2 percent of one's adjusted gross income. Before the passage of TCJA, miscellaneous itemized deductions exceeding 2 percent of one's adjusted gross income were deductible on Schedule A as an itemized deduction. Miscellaneous itemized deductions include:

• Tax preparation fees such as the cost of tax preparation software (for example, Turbo Tax), tax publications and fees paid for tax advice and electronic filing;
• Investment fees, custodial fees, trust administration fees and other expenses paid for managing one's investments that produce taxable income;
• Union dues, professional fees and out-of-pocket employee business expenses.

Moving expenses

The third deduction that is not generally available for tax years 2018-2025 is moving expenses, except for members of the Armed Forces who are on active duty, and due to a military order, move as result of a permanent change of station.

Before 2018, individuals could deduct moving expenses in connection with a move only when the move was job-related, and a distance test and a time test were met. Gambling boats in tampa florida. For example, a federal employee who changed job locations in which the jobs were more than 50 miles apart could potentially deduct certain moving expenses that were reimbursed by their new employer.

But under TCJA, these tests do not apply to moves made by members of the Armed Forces on active duty because of a permanent change of station. Deductible moving expenses include: (1) costs of moving household goods and personal effects; and (2) travel expenses, including lodging but not meals for one trip by the individual and each member of the household. Household members do not have to travel together or at the same time.

Form 3903 is filed to deduct qualified moving expenses in excess of any uniformed services reimbursements. The deduction is an adjustment to income and is reported on Form 1040, line 26, Schedule 1.

The Tax Cuts and Jobs Act of 2017 (TCJA), which was passed into law in December 2017, took effect on Jan. 1, 2018. TCJA's passage has resulted in the loss of three important tax deductions that are affecting individual tax returns.

This column discusses these lost deductions and how they may affect federal employees as they prepare their 2018 federal tax returns.

The first deduction discussed is the deduction for casualty and theft losses. Until 2018, personal casualty and theft losses were deductible as part of one's itemized deductions. But for the years 2018 -2025 when TCJA is in effect, personal casualty and theft losses are not deductible unless these losses are incurred in a federally declared disaster or, if an individual has a personal casualty gain, to the extent of such gain. The gain is therefore 'netted out' by this casualty loss and no capital gain taxes are paid. Personal casualty losses that are potentially deductible are reported on IRS Form 4684 (Casualty and Theft Losses, Part A).

What is a federally declared disaster?

A federally declared disaster is a disaster that occurred in an area directed by the President to be eligible for federal assistance. An ongoing list of federally declared disasters is available on the Federal Emergency Management Agency (FEMA) web site at www.fema.gov.

A loss to personal use property is deductible if the loss is due to fire, storm, shipwreck, or other casualty. A casualty is the damage, destruction or loss resulting from a sudden, unexpected, or unusual identifiable event. The casualty loss must be reduced by actual insurance reimbursement and by any expected reimbursement. If the property is covered by insurance, an insurance claim must be filed. Otherwise the casualty loss is not allowed.

An example of a potentially deductible casualty loss is the loss of a home located in the areas affected by the California wildfires that occurred in the fall of 2018.

Miscellaneous itemized deductions

The second deduction that is not available for tax years 2018 -2025 under the TCJA is miscellaneous itemized deductions exceeding 2 percent of one's adjusted gross income. Before the passage of TCJA, miscellaneous itemized deductions exceeding 2 percent of one's adjusted gross income were deductible on Schedule A as an itemized deduction. Miscellaneous itemized deductions include:

• Tax preparation fees such as the cost of tax preparation software (for example, Turbo Tax), tax publications and fees paid for tax advice and electronic filing;
• Investment fees, custodial fees, trust administration fees and other expenses paid for managing one's investments that produce taxable income;
• Union dues, professional fees and out-of-pocket employee business expenses.

Moving expenses

The third deduction that is not generally available for tax years 2018-2025 is moving expenses, except for members of the Armed Forces who are on active duty, and due to a military order, move as result of a permanent change of station.

Before 2018, individuals could deduct moving expenses in connection with a move only when the move was job-related, and a distance test and a time test were met. Gambling boats in tampa florida. For example, a federal employee who changed job locations in which the jobs were more than 50 miles apart could potentially deduct certain moving expenses that were reimbursed by their new employer.

But under TCJA, these tests do not apply to moves made by members of the Armed Forces on active duty because of a permanent change of station. Deductible moving expenses include: (1) costs of moving household goods and personal effects; and (2) travel expenses, including lodging but not meals for one trip by the individual and each member of the household. Household members do not have to travel together or at the same time.

Form 3903 is filed to deduct qualified moving expenses in excess of any uniformed services reimbursements. The deduction is an adjustment to income and is reported on Form 1040, line 26, Schedule 1.

Gambling Losses Under New Tax Law

Gambling Losses Under New Tax Law