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-   -   Taxes on winnings? (http://www.cruisemates.com/forum/gambling-games/303767-taxes-winnings.html)

baronzemo November 10th, 2005 02:43 PM

Taxes on winnings?
 
Just curious (probably a stupid question). If your an American citizen, gambling on international waters, on board a ship registered to Panama, and you win lets say 50,000 dollars. Is the money tax free or whom do you have to pay taxes to?

Thomas November 14th, 2005 01:41 PM

Sorry, Uncle Sam will get his share just as he would if you work overseas.

REgards,
Thomas

cruiserqueen November 19th, 2005 04:54 AM

I am not sure what happens. I won $2700 in Bingo and was told I didn't have to report it and I won $1600 in a slot machine on a Transatlantic and told it wasn't reported. I was on the Regal Princess in Hawaii and sign posted that any win on slots over $600 would have taxes taken out by the casino before you collected. This may have been because we were in American waters.

luv2cruise99 January 2nd, 2006 04:27 AM

They are supposed to report if you win over a certain amount. I think the amount varies depending on what game you win it on (I don't know why that matters) and, I believe, it is somewhere in the neighborhood of $1500 on slots.

If you do win enough for the ship to report it to the U.S., it is still fairly easy to avoid paying taxes on it because you are allowed to offset your gambling winnings with gambling losses that occur within the same tax year. Go into any U.S. land-based casino and ask a cashier for a "loss slip" for $xxxx amount. Keep the amount of each loss slip small, say under $2500, and the cashier will give you one based solely on your word that you lost that amount playing in their casino. Go back several times, if necessary, to get enough loss slips to offset your entire winnings. Then turn these loss slips in at tax time to prove that you had gambling losses to offset your winnings. To be extra safe in case of an IRS audit, make an ATM withdrawal or cash a check at the casino in the amount of each loss slip on the day that you are claiming the loss.

Of course, unless you're content in hiding money under the mattress, the above only works if you win a relatively small amount so that it's not easily apparent that your winnings are never really being lost.

I'm not saying that I have actually done this or that it is the right thing to do, but I worked for a tax accountant for 15 years, and you would be surprised how many clients avoid paying taxes on gambling winnings with the above technique.

Archie January 2nd, 2006 07:07 AM

The US taxes on all money gained Worldwide. According to the US tax law all gambling winnings must be reported regardless of size. The casino only reports winnings over a certain amount (varying by game). So if you win $50 playing blackjack or slots should it be reported? Yes but 99.99% of people will not report that small an amount since the IRS will never know the difference.

HappyCruiser383 January 3rd, 2006 05:31 PM

taxable or not?
 
I want to know why the IRS feels the winnings should be taxable. Figure this . . . we take our earned money - after taxes - to the casino and plug it into the machine. So, all money IN the machine should be after-tax money. Why does the IRS need to tax it again when it comes back out as a winning? Who can I call to fix this problem? :shock:

luv2cruise99 January 3rd, 2006 07:18 PM

Re: taxable or not?
 
Quote:

Originally Posted by HappyCruiser383
I want to know why the IRS feels the winnings should be taxable. Figure this . . . we take our earned money - after taxes - to the casino and plug it into the machine. So, all money IN the machine should be after-tax money. Why does the IRS need to tax it again when it comes back out as a winning? Who can I call to fix this problem? :shock:

I would love the answer to that question, too. I mean, if I lose $5,000 the IRS doesn't want to hear about it, but if I win $5,000, all of a sudden they want their piece of the pie. How is that fair?

whenever42 January 5th, 2006 06:40 PM

i agree totally! I think you should get what you win! IRS gets enough with the other casinos!

baronzemo January 19th, 2006 01:50 PM

I belive the way it works is, if you win $600.00 dollars or more they give you a W-2 form. Thus they (casinos, horse track, etc) report the winninigs for you. Any winnings under $600.00 is your responsibility to report to the IRS. Thats why you see people at the race tracks by multiple tickets for the same bet. So if all the tickets win thier under 600.00 and they don't report it.

Not sure how they do it on the ship though. I guess it's just your responsibility.

grod19 January 19th, 2006 02:43 PM

If you win more then 1199 in one pull of a slot machine you must report it. If you win 300 times you bet in a table game (so 1500 on a 5 dollar bet) then you will get a W2 at the casino.

The cruise lines are more lienient because they arent US registered.

FC Corp January 29th, 2006 08:17 PM

Federal law dictates that upon re-entry you must declare money ($10k or more) whether it be in the form of cash or any type of check. If you go through customs with this amount on you and do not declare it, you can and will be arrested. When you do declare it, you are given an IRS form and your personal information along with dollar amount and how and where it was obtained goes into a database. Custom uses this information to track any future declarations and to determine whether or not you are on the up and up.

Word of advice, if you do declare and are given the IRS form, you better claim it on your taxes as your profile has been red flagged to look for that amount.

I have never had a cruise ship give me a W-2 or 1099 for my winnings. Normally I wire $15-20k ahead of time into my account and take markers along the way. If I end up with more than $10k upon leaving, I ask the casino to mail me a check.

Rick February 15th, 2006 02:26 PM

Simple answer... NO, casino wins are not reported to the IRS.

shofer February 16th, 2006 02:37 PM

I won $1700 in a split bingo prize and $1300 in small amts playing 3-card poker and I did not have to fill out a W-2. Should I report it, yes. Will I report it, I don't think so. :wink:

baronzemo February 17th, 2006 01:58 PM

Quote:

Originally Posted by FC Corp
Federal law dictates that upon re-entry you must declare money ($10k or more) whether it be in the form of cash or any type of check. If you go through customs with this amount on you and do not declare it, you can and will be arrested. When you do declare it, you are given an IRS form and your personal information along with dollar amount and how and where it was obtained goes into a database. Custom uses this information to track any future declarations and to determine whether or not you are on the up and up.

Word of advice, if you do declare and are given the IRS form, you better claim it on your taxes as your profile has been red flagged to look for that amount.

I have never had a cruise ship give me a W-2 or 1099 for my winnings. Normally I wire $15-20k ahead of time into my account and take markers along the way. If I end up with more than $10k upon leaving, I ask the casino to mail me a check.

So are you saying to have the ship always mail a check or would it be better to give your spouse 5k and keep the other 5k for your self, and now no one has to declare it.

Mike M February 17th, 2006 02:21 PM

If your winnings are greater than $10,000 you will be required to pay taxes on that amount.

I have not won $10K on a single cruise but well into the four digits and have never had taxes withheld. The winnings were accumulated over multiple nights with over $1,000 in a single evening. I do not play slots, only table games.

Take care,
Mike

Rick February 17th, 2006 05:04 PM

Quote:

Originally Posted by Mike M
If your winnings are greater than $10,000 you will be required to pay taxes on that amount.

I have not won $10K on a single cruise but well into the four digits and have never had taxes withheld. The winnings were accumulated over multiple nights with over $1,000 in a single evening. I do not play slots, only table games.

Take care,
Mike


There is no record kept by the casino as to what you won over the course of the cruise so how would you be "required" to pay taxes on amounts over 10000? Just curious..thanks.

Mike M February 17th, 2006 05:45 PM

Rick,

If you return to the U.S. with greater than $10,000 in cash it must be declared and taxes and duty must be paid.

If it isn't declared you are in for a world of hurt.

Also, if you set up a line of credit or have a letter of credit from a U.S. financial institution that amount is logged and amounts above that will be logged and reported.

Take care,
Mike

Rick February 17th, 2006 06:12 PM

Thanks Mike.

Fern February 17th, 2006 08:54 PM

From what I understand you do have to declare your winnings, BUT, you should keep up with what you lose, too! You can offset your winnings by your losings!

In Arkansas (and probably in other states) you can register as a "professional gambler" with the IRS, even though gambling here (and maybe where you live) is illegal.

You just have to keep up with what you lose and what you win.

i.e., if you've lost $2000.00 on blackjack and won $3000.00, all you pay taxes on is the $1000.00, IF you have proof! You have to request receipts.

This is from my experience with my "Boss" of quite a few years ago.

If it is not correct now, please let me know!

Mike M February 17th, 2006 10:52 PM

Fern:

You are correct. You can deduct your legal gambling losses but if you do you must declare ALL of your legal gambling winnings and have the records to prove it.

It is pretty hard to prove unless you have receipts from casinos, OTBs, racetracks, and other types of gaming operations.

If you gamble in the U.S. in a legitimate casino and hit a large jackpot, usually over $1,200 you will have taxes removed on the spot and receive an IRS form W2G or a 1099. I have never received either from a cruise but then again none of my winnings have been one time jackpots. I have won jackpots in Las Vegas and have been issued a W2G.

If you are a big time gambler you can do an IRS Schedule C and set it up as your occupation.

Take care,
Mike

FC Corp February 26th, 2006 12:28 AM

So are you saying to have the ship always mail a check or would it be better to give your spouse 5k and keep the other 5k for your self, and now no one has to declare it.[/quote]

No, if you can split to keep the amount under 10k each, that is fine. Since I travel with my young son, it would be hard to justify (if questioned), why my son (12) is walking around with several thousand in his pocket. :)

ShaneMC316 July 18th, 2006 12:09 PM

You are ONLY required to pay taxes on winning if the ODDS are above 300:1. This is true in LAND based casinos all over the country! If you win 25,000 over the course of a few hours playing blackjack then you are NOT required to fill out any forms.

It is up to YOU to declare it or not. If you win the SAME 25K on a jackpot in a slot you ARE required to fill out an IRS form and have taxes withheld. Trust me on this!

As for gambling outside of the US, there is nothing required. I know for a fact that if you win $100,000 jackpot in the Bahamas or Canada, nothing will be forwarded back to the IRS in the states.

It might just be a little tricky to get the money back in the US undetected! But that is what I call a GOOD problem!

crabbie1 September 3rd, 2006 06:10 PM

Taxes on winings?
 
ShaneMC316

I would LOVE to have to pay taxes on $100,000 win. I am not that lucky. The most I have won at one payout (not a jackpot) was $1500 in Las Vegas on penny slots last week. I am glad the penny slot paid off, the $1.00 sure didn't.

Come on $100.000.

crabbie1

Cassandra September 24th, 2006 09:56 PM

I know at the Casino's here in Connecticut - which are owned by the Indians - that they report to the IRS if your winnings are $10,000 or over.

Anything below that is yours. And believe me, the State of CT gets a good chunk of those casino earnings by the 2 casino's.

dmcrews4202 September 25th, 2006 11:52 AM

Oh dear....

By law...every penny you earn should be reported as income, regardless of source: wages, salary, interest, investments, tips, gambling winnings, fair market value for gifts....everything....

For gambling winnings, you should keep track of all your gambling losses as well, since gambling losses can offset winnings, no matter how large/small. If you win a $20,000 jackpot, but rack up $20,000 in losses over the year (naughty you), you don't owe a penny of taxes on the jackpot. (although you might have had some witheld by the IRS, and will be owed a refund). These losses are for general gambling, not the same game. So you could hit a lottery jackpot, and still deduct the purchase of all tickets, blackjack, poker and slots. However you must keep very good records should the IRS choose to audit your records.

That is the law...it is up to each individual how important it is to follow the law. (In practice a very many things go unreported)

Of course, failing to report income is really only a sticky legal issue if you are then audited.

Now...something else you might want to be aware of. Since the events of 9/11/2001, federal regulations on financial institutions have considerable tightened. Your bank is required by law to report any large transactions (say a $10,000 deposit for example). If you do win a large amount, and elect not to report it as income, you should also keep in mind that the IRS might have been informed by your bank of a large deposit even though the ship/casino did not have to report it.

marinjk October 10th, 2006 06:46 PM

I can tell you by experience after winning the bingo jackpot of $3500, I was approached by a member of the ships crew and asked if I were a US citizen and when I responded yes, I was told I would have to pay taxes on the winnings. She filled out a 1098 form for me. Had I been German or European I would not have had to pay taxes or fill out any form. Moral of story: Put on your accent and list some wierd place other than the US if you hit it big.

tbill60 October 18th, 2006 12:53 PM

I won $4000 (hit a royal on $1 poker on the last night) on my Golden Princess cruise in March of 2002....I was extremely excited, jumping up & down, yelling, screaming...and then I came back to earth and asked the attendant if I had to pay taxes on it....his response to me was "we are not going to report it".."it is not up to us what you do on your end".....so....I guess it is very inconsistent as are a lot of things that happen while on a cruise. :shock:

Joekerry December 5th, 2006 08:53 PM

I was fortunate enough to hit $4000 on Treasure Tunnel, a quarter slot machine on the Carnival Facination in April of 04. I was given the entire $4000 and believe it or not, the casino would NOT give me a check, they said they had to pay me in cash! I promptly placed it in the ship safety deposit box which was free. I was mailed a Wg-2 form, and was required to pay the taxes on this regardless of the fact we were in international waters at the time I won, yet was smart enough to search for every losing scratch ticket I could find when I got back to Massachusetts (most of which I bought, haha), to be able to offset the winning with the loses.

DonD December 12th, 2006 12:07 PM

The issuance of W2-Gs is very inconsistent among the cruise industry. I wish I knew the answer. When they don’t issue one, I am afraid to ask about it.

nvabill May 12th, 2007 12:13 PM

Last cruise I was on a fellow won $7200 on slots and Carnival required him to show his photo ID, gave him a tax form and would only pay him in cash.


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