Gambling With an Edge - tax professional Russell Fox
As the game nears, millions of Americans are choosing, and betting on, their favorite to take home the Vince Lombardi Trophy this year.
Many are just friendly wagers -- a dollar in the office pool or a good-natured bet with the neighbor who's jumped on that overcrowded Patriots' bandwagon.
But other football fans are taking the game more seriously and handing over big bucks to bookmakers, both legal and not-so-legal.
All these Super Bowl wagers spotlight a best way to play las vegas slot machines Internal Revenue Service problem: tracking and taxing gambling winnings.
It's a challenge the agency faces daily, because many people don't realize that gambling winnings are taxable.
Of those who do, a good portion simply choose to ignore the law.
Admittedly, the IRS is playing catch-up taxes gambling winnings las vegas />Dice almost identical to those used on today's gaming tables have been recovered from Egyptian tombs, and the Chinese, Japanese, Greeks and Romans all were taxes gambling winnings las vegas to play games of chance as early as 2300 B.
Nowadays, in addition to the well-publicized offerings of Las Vegas, Reno and Atlantic City, betting is commonplace throughout the United States.
The choices range from off-track betting parlors to tribal bingo games to riverboat casinos to state-operated lotteries.
Online gambling down, but not out Then there's online gaming.
A June 1999 Washington Post article reported "at least 140 Web sites now offer some form of wagering to online users -- an expansion in recent years that has alarmed opponents and put increased focus on the laws that govern Internet gambling.
It's easy to see why the numbers have grown so much.
Type "online gambling" into any Internet search engine and within seconds you'll have a list of hundreds of thousands of potential gambling sites.
This is in spite of the Unlawful Internet Gambling Enforcement Act, which was passed without much fanfare and signed into law in late 2006 in taxes gambling winnings las vegas effort to restrict U.
It is now a federal crime for U.
But even before the law was enacted, U.
In recent years, many credit card issuers already had halted such transactions, citing risk factors if the taxes gambling winnings las vegas disputes or refuses to pay the charges.
The latest antigambling law and associated enforcement efforts are getting mixed reviews and equally mixed results.
Some companies have curtailed their U.
Following the arrest in July 2006 of its CEO, the once ubiquitous BetOnSports.
Other legal troubles subsequently shut down the entire company.
Since the 2006 law allows online wagers on horse and dog racing, Antigua successfully argued that the statute unfairly forbids international companies from competing in the U.
The regulatory goal is to block online gambling by disrupting the credit card payment process.
The Treasury Department and Federal Reserve Board issued a last October.
The comment period ended in mid-December, with most finding las poker play vegas omaha proposed rules wanting.
A common problem cited by reviewers was the vagueness of what constitutes gambling.
Many noted that various U.
And as the international legal and domestic regulatory wrangling continues, online gambling sites and their cyberpatrons are adapting.
Some sites have introduced dedicated debit cards and alternative, although circuitous, e-payment and electronic wallet services.
It's a good bet that millions of U.
So many events, so many bets Combine all these gambling options with Americans' love of athletics, and betting on sporting events has arguably become the true national pastime.
If you want to keep your sports wagering domestic, legal betting on athletic events is allowed only ballys las vegas slots Nevada.
Las Vegas alone draws millions of visitors each year expressly for that purpose.
In the United States, Pregame.
The dollars add up because there are countless ways to get share rio las vegas casino map from piece of the action.
The Patriots are 11-to-13 point favorites, but wagers aren't just placed on the eventual winner.
You can bet on who will catch the first pass, who will rush for the most yardage team and individualwho will get the first sack.
Known as prop bets, short for proposition bets, there are approximately on the big game.
Essentially, if it happens or could happen in a football game, the Nevada sports book operation will take a bet on it.
But casino bets aren't a real concern for the IRS.
The tax man has a way to track legal athletic wagering.
It's a dicier tax-collection proposition, however, when it comes to bets placed at increasingly popular offshore sports-betting operations, dollars dropped into friendly office pools and illegal wagers handled by bookies.
These bets, according to the American Gaming Association, represent more than 99 percent of all sports betting nationwide.
Why the bells go off Legal betting operations -- state lotteries, casinos and horse racing tracks -- are regulated.
One of the government agencies that has a say in these operations is the IRS.
Gambling winnings from bingo, keno and the slots are not generally subject to withholding, but you're still required to provide your tax ID.
If you refuse, the casino can assess backup withholding of your jackpot at a 28-percent rate.
The new reporting requirementaimed at poker tournament sponsors, including casinos, will help the IRS ensure that card game winners are including their winnings on their annual tax returns.
Those poker tourney winnings, along with your jackpots from the casino or horse track or lottery dealer, will be recorded on a showing how much you won and how much, if any, was withheld for federal taxes.
And like all other income reporting forms, a copy will go to the IRS.
But, Shelk notes, there's a distinction between what's reportable and what's taxable.
How tempting is las vegas online games casino to assume the IRS won't miss a small jackpot?
Apparently pretty darn appealing.
IRS analysis of 2005 returns, the latest year for which data are complete, shows 1.
This includes winnings from casinos and horse tracks, lottery and raffle jackpots, as well as the fair market value of cars, houses and other noncash prizes.
As for how many taxpayers didn't bare all about their betting at tax time, the IRS won't even venture a guess.
But the IRS has a tax break for conscientious taxpayers who report their gambling income on line 21 of their Form 1040.
They can subtract any gambling losses from winnings if they itemize.
For many, that's a good deal.
Losses to reduce gambling winnings don't have to be from the same game.
There are a couple of ground rules to keep in mind here.
First, you can't claim more in losses than you've won.
And, as with any tax deduction, you need to keep records of your losses that will satisfy the IRS if you're ever audited.
Such reconstruction efforts not only are difficult, they aren't likely to pass IRS scrutiny.
Tax professionals recall a horse race fanatic who went to tax court with bags full of losing betting slips to support his large deduction against his winnings.
It didn't work; almost every ticket was covered with footsteps of the other bettors who tossed the tickets when their horses didn't win.
He ended up paying the extra tax -- and penalties.
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How to Pay The IRS Taxes on Sports Betting
In Nevada, particularly in the Gambling Meccas of Las Vegas and Reno,. Gambling winnings in Nevada are fully taxable and must be ...
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