Taxes On Casino Winnings

A question for casino customers. Let's say that I, an American citizen, while cruising on a foreign flagged ship, in International waters, won $5000 in the casino. What would be my tax liability?

I don't know the tax rate, but you still have to pay regular taxes. Me and DH saw someone on a ship in 09 win 98K. They had to wait to get to St Thomas come aboard and verify the machine and then got paid.

All the way at the bottom...

http://www.oceanplayersclub.com/vip-services/faqs.aspx

Edit: to answer the question, yes, it's taxable income. If you're a US citizen or resident alien, you are taxed on your worldwide income. And, no, just because you don't receive a 1099 for something doesn't mean it isn't income. Just thought I'd put that out there because so many people want to believe that cash somehow doesn't count. And, yes, I'm a CPA.

Yes you have to pay taxes. When we won in ship they took 25% for the taxes Then you get a 1099

That's just the information I needed. Thanks all for the posts.

The amount of taxes you have to pay I. The end will depend on your yearly income

I was lucky enough to win $1200 this past May on the breeze. They did give me tax paper (1099?) stating that it would be reported to the IRS. They did NOT with hold any taxes from the amount I won. **Pretty good investment playing 60 cents on a penny machine!!

My husband win over 25000. Hence the 25% taken out.

If you get a 1099 for Gambling winnings, the IRS will allow you to write off any gambling LOSSES up to that amount. So, for 2015, if you won 10,000, got a 1099, and took a vegas trip and lost 10,000, you would have a zero tax liability on that amount. However, you must have receipts, documentation, etc. in case the IRS audits you. Ust to be the IRS would accept state lottery tickets, dog/ horse racing tickets and others as gambling losses. Don't know as of now. Check with a CPA.

If you get a 1099 for Gambling winnings, the IRS will allow you to write off any gambling LOSSES up to that amount. So, for 2015, if you won 10,000, got a 1099, and took a vegas trip and lost 10,000, you would have a zero tax liability on that amount. However, you must have receipts, documentation, etc. in case the IRS audits you. Ust to be the IRS would accept state lottery tickets, dog/ horse racing tickets and others as gambling losses. Don't know as of now. Check with a CPA.

If you are playing with a players club card in the machine, you can ask the casino(s) to give you a win/loss statement which is a good record to show IRS. Land based casinos will have these available for you after the end of the year, usually be February 1st.

Beware, when you use the win/ loss statement to prove your losses, they do some sort of strange taxing of the whole amount you gambled. I won $1300.00 on Breeze in Nov, submitted my win/loss to prove I won less then I spent. They look at the money you spent and do what my accountant basically calls " a tax for being a gambler". So before you send in the win/ loss statement you might want to "talk" to your tax folks ahead of time. My tax guy said, I can't UNSEE what you showed me. I'm paying $2400 in taxes on a 1300$ win.

Beware, when you use the win/ loss statement to prove your losses, they do some sort of strange taxing of the whole amount you gambled. I won $1300.00 on Breeze in Nov, submitted my win/loss to prove I won less then I spent. They look at the money you spent and do what my accountant basically calls " a tax for being a gambler". So before you send in the win/ loss statement you might want to "talk" to your tax folks ahead of time. My tax guy said, I can't UNSEE what you showed me. I'm paying $2400 in taxes on a 1300$ win.

Are you sure you didn't win more than you gambled? I ask because we have been using win/loss statements from land based casinos for many years and have never been audited. You have to itemize, and you can't deduct more than you lost, but it really helps on our taxes. And since a close relative of ours is an IRS Revenue Agent and also uses win/loss statements, we feel pretty secure about this. As a Revenue Agent, this relative IS audited every year and has never had a problem with their casino jackpots.

A win/loss statement by itself is not sufficient proof for the IRS, but it is a good supporting document to be used against your own win-loss records that you would be expected to keep, as with any other self-employed person (which, when you get right down to it, is what gambling income is considered).

That said, us Canadians don't have to worry. Unless you are a professional gambler, gambling winnings are considered windfall under traditional common law and not subject to tax. When we win on board, I believe they still issue a 1099 essentially for their records, but it certainly isn't reportable income to the IRS and it's just a piece of paper for the Canada Revenue Agency.

(Note: If you have more than $10,000 in cash or cheques, you still have to report that at U.S. and Canadian customs. It's not taxable, but it can be confiscated if not claimed. And for the U.S. that means reporting it when you arrive back to port and again when you're leaving the country.)

Excuse my ignorance what is a 1099, I assumed your winnings from gambling were tax free such as the lottery. I pay UK tax maybe it is different.

Excuse my ignorance what is a 1099, I assumed your winnings from gambling were tax free such as the lottery. I pay UK tax maybe it is different.

We get W2Gs for gambling winnings and 1099 forms for types of miscellaneous income. Both are reported to IRS for tax purposes. All of these types are reportable income that we need to note when we file our tax reports. :(

Always file on line My losses equal my winnings on my taxes as that is all you can deduct. In actuality. losses are more than winnings. Have never been audited or had to submit proof such as win/loss statements

I assumed your winnings from gambling were tax free such as the lottery. I pay UK tax maybe it is different.

In the U.S., lottery and gaming winnings are considered taxable income. As a non-resident, you would normally be subjected to a 30% withholding tax and would receive IRS Form 1042-S. But the cruise ship isn't in the U.S. and therefore you would not be subject to U.S. tax. (This does not apply to U.S. residents, as they are taxable on their world income regardless where it is earned.)

As a UK resident, you actually would be exempt on a land-based casino or lottery win as well under the US-UK tax treaty. No such exemption for us Canadians. If we want to get our U.S. taxes back, we have to file a 1040-NR U.S. income tax return at the end of the year.

 

As a UK resident, you actually would be exempt on a land-based casino or lottery win as well under the US-UK tax treaty. No such exemption for us Canadians. If we want to get our U.S. taxes back, we have to file a 1040-NR U.S. income tax return at the end of the year.

Solution is if you and I are on the same cruise and you win then tell them it is mine and we will share it :)

Beware, when you use the win/ loss statement to prove your losses, they do some sort of strange taxing of the whole amount you gambled. I won $1300.00 on Breeze in Nov, submitted my win/loss to prove I won less then I spent. They look at the money you spent and do what my accountant basically calls " a tax for being a gambler". So before you send in the win/ loss statement you might want to "talk" to your tax folks ahead of time. My tax guy said, I can't UNSEE what you showed me. I'm paying $2400 in taxes on a 1300$ win.

I would get a new tax guy, and yes, I am a CPA

That said, us Canadians don't have to worry. Unless you are a professional gambler, gambling winnings are considered windfall under traditional common law and not subject to tax. When we win on board, I believe they still issue a 1099 essentially for their records, but it certainly isn't reportable income to the IRS and it's just a piece of paper for the Canada Revenue Agency.

 

(Note: If you have more than $10,000 in cash or cheques, you still have to report that at U.S. and Canadian customs. It's not taxable, but it can be confiscated if not claimed. And for the U.S. that means reporting it when you arrive back to port and again when you're leaving the country.)

They don't issue a 1099 to a Canadian who wins on the ship; there is a separate form to complete based on the tax treaty and being a non-resident that they will have you fill out and they will submit. They will not actually hand you a 1099. (I won $3600 on a Carnival Cruise in March 2015).

They don't issue a 1099 to a Canadian who wins on the ship; there is a separate form to complete based on the tax treaty and being a non-resident that they will have you fill out and they will submit. They will not actually hand you a 1099. (I won $3600 on a Carnival Cruise in March 2015).

First of all, congratulations!

Did they hand you any tax receipt? In a land casino you'd get a 1042-S but I didn't think that would apply on the ship as there are no taxes withheld. I'd want to have some sort of proof-of-win if I won over $10,000 and had to report it at both U.S. and Canadian customs. (Hey, it could happen!)

We have always used our win/loss statements for tax reporting.

From the IRS site:

To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.

http://www.irs.gov/taxtopics/tc419.html

BTW... Royal Caribbean JUST started issuing W2-G's/1099's for wins over the threshold amount required by IRS.

First of all, congratulations!

 

Did they hand you any tax receipt? In a land casino you'd get a 1042-S but I didn't think that would apply on the ship as there are no taxes withheld. I'd want to have some sort of proof-of-win if I won over $10,000 and had to report it at both U.S. and Canadian customs. (Hey, it could happen!)

No Tax receipt at all. They just gave me a paper which I had to turn into the cashier to collect the money (they didn't hand pay me at the machine - I had to go get my ID and go to the cashier with the paper to be paid).

If you won over $10,000 and were transporting the cash across the border, you don't need any proof of win, you just need to declare it.

When leaving the ship, you'll need to complete a FinCEN105 form for US Customs. When you cross over into Canada Border Services will have you complete a declaration form (an E677).

There's no restriction for carrying more than $10,000 over the border as long as you declare it.

In the U.S., lottery and gaming winnings are considered taxable income. As a non-resident, you would normally be subjected to a 30% withholding tax and would receive IRS Form 1042-S. But the cruise ship isn't in the U.S. and therefore you would not be subject to U.S. tax. (This does not apply to U.S. residents, as they are taxable on their world income regardless where it is earned.)

 

As a UK resident, you actually would be exempt on a land-based casino or lottery win as well under the US-UK tax treaty. No such exemption for us Canadians. If we want to get our U.S. taxes back, we have to file a 1040-NR U.S. income tax return at the end of the year.

As a UK resident you would need to complete a W8BEN form to be able not to have any winning with held

I should get lucky enough to win something big enough to require a W2G. I have never gotten that lucky in 5 cruises. However, I have seen on RCI and Carnival that when you win under 10K, they give you a paper receipt and you collect at the cage. They did not issue any W2G's. I do not know what they do now, or how they handle it.