IRS and Other Matters

The material in this chapter is not as much fun as learning about blackjack or video poker, but it's important. We'll keep it short and sweet.

Uncle Sam's house edge

The IRS expects you to pay taxes on your gambling income. Casinos are required by law to file a form W2-G when they pay you $1,200 or more on a machine win, $1,500 in keno, or when you cash in $5,000 or more in chips. You should have your Social Security number handy or the casino will automatically withhold 30 percent.

Gambling losses are only deductible to the extent that they offset wins. Let's say you win $4,000 and lose $10,000. You can only deduct $4,000.

The income must still be reported and the loss must be documented. Your records must be detailed and they should show when you bet and how much you lost.

One advantage of keeping records is that it helps you remember where the money went. This player is doing better at blackjack than video poker. If the trend continues, she should switch exclusively to blackjack or practice her video poker strategy.

So even if a big win doesn't come your way this year, it's always helpful to keep records as if it will. You never know.

Personal security

In the last chapter we told you that cash is king in the casino. Unfortunately, carrying large amounts of cash is risky.

video poker strategy

a casino line of credit