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Winning Gamblers Still Lose If They Don't Keep Track for Taxes

Caesar's Palace -- slot machines
Beginning cash = $315
Start time: 1:30 p.m.
End time: 3 p.m.
Ending cash = $290
Net win/(loss) = ($25)

Net daily activity -- slot machines
Wins = $115
Losses = $25

The next day you return to Bally's and play both the slots and Blackjack:

7/17/2013 -- Atlantic City, N.J.
Bally's Wild West -- slot machines
Beginning cash = $290
Start time: 1 p.m.
End time: 2 p.m.
Ending cash = $240
Net win/(loss) = ($50)

Bally's Wild West -- blackjack
Beginning cash = $100
Start time: 2 p.m.
End time: 3 p.m.
Ending cash = $0
Net win/(loss) = ($100)
Table #234567

Net daily activity -- slot machines
Wins = $0
Losses = $50

Net daily activity -- blackjack
Wins = $0
Losses = $100

You did not win enough in one pull to get any additional Form W-2Gs at Caesar's or the next day at Bally's. The $175 in net losses from the two days from slots and blackjack could be included in gambling losses claimed on Schedule A if you itemize.

By reporting $115 as gambling winnings on Page 1 of your Form 1040 instead of $1,300, you reduce your AGI by $1,185. While your net taxable income, $0, would be the same whether you reported $115 or $1,300 on Page 1 and were able to deduct losses on Schedule A, your actual tax liability may be less by claiming the lower amount of winnings. And if you are not able to itemize and claim losses you will certainly pay less federal income tax by reporting only $115 as your winnings.

Not being a gambler, I do not know how detailed the information you get from using your Player's Club cards is. It is possible that printouts would support the individual activity by date you have entered in your book. Do not, however, assume the printout of card activity is enough proof -- you should still maintain your own contemporaneous gambling log.
Robert Flach has more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro .
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