Just a question. I have had several nice pays but never a signer. The question I have is can you ask the casino to take out the standard deduction so you wont be stuck stashing cash aside come income tax time?

I once heard that there is a limit to the amount that you need to win before they can hold money for the IRS. Also I can remember seeing an IRS desk at the trop in AC some years ago.

Paman

As far as I know, you can always make a payment to IRS, to cover your future tax liabilities. Then, when you file your tax later on, you claim this payment, hence you will be exempt from paying interest on taxes owed.

For example, if you make a stock trade today, and say make $1M in profit, you shouldn't be waiting until April of 2011 to report it and pay the taxes owed. IRS expects you to pay the associated taxes today (i.e. send IRS a check in the amount of $300K). Same should apply for a jackpot. If you wait for a year to pay the taxes associated with profits during the year, IRS will charge you interest, as well as they might charge some penalties (don't know of any threshold etc.).

Disclaimer: Not intended for tax advice, but just my personal knowledge. Please consult an expert.

My husband had a big win in'08. We asked the casino to deduct 25% in Federal taxes from the check and also deduct the Michigan state taxes. So the W2-g reflected this. We also paid estimated taxes to our home state of Illinois within a few weeks of winning. We did not want to risk getting charged a penalty for not getting the estimated taxes in on time.

With smaller wins ($1200-$3400), the casinos have just taken their state taxes, but I send an estimated payment in to the Feds- again to avoid a penalty.

My husband won this jackpot in August '08. After we filed our taxes in February '09,we received a letter from the IRS stating we owed a penalty for not making estimated payments throughout the previous year. I wrote a letter explaining that we could not have known in Jan'08 that we would win in August '08. So they then waived the penalty.

I'm not sure I agree with paying estimated, note "estimated" (during year won), taxes on taxable income from gambling. Those who win a lot typically lose a lot and end up by year's end up with no taxable gambling winnings.

Consult your tax advisor though.

I believe there is a book out by a certain Walter Lewis regarding keeping more of what you win.

a bit off topic here but how big was the win?

It was $50,000. on a penny Zorro progressive.

We didn't expect to have a loss to offset that between August and December -and we didn't. If it had happened earlier in the year, I might have handled the taxes differently.

how much were you betting on that? How much were you tax and does the US have tax credits?

The dilema for me always in the states is that I am hoping for a big win but I am so afraid of uncle sam. My ex ex gf hit a 10k jackpot in vegas and I hit a 25k jackpot last year in the states a minor one of just over the 1200 limit last year and taxes was terrible I claim a bit of it back but still hate giving money to uncle sam

My husband was playing x2 initially (I think this was a 20 or 25 line machine). He hit several bonuses and turned $20 into $140. After that he started to play max -so say $2.50 and got another bonus which got him the highest progressive.

We paid $12,500. in taxes on the jackpot, but we itemize deductions on our tax return. So along with our gambling losses, we deducted mortgage interest, property taxes,charitable donations, medical expenses, etc from our income. We ended up getting a $10k refund. How it all works out depends on your personal situation.
A tax adviser would be best able to answer your questions and address your situation.
Nor

Ok I need help. Ive looked everywhere and cannot locate my W2G from last year. I think I had 3 but not sure. I know I paid the state tax part but not the federal. How can I get copies of those W2G? My husband says "screw the govt" (lovely) but since I paid the state, I would think it would be too easy to get flagged for not paying the federal. Any suggestions would be greatly appreciated.