Taxes On Slot Machine Winnings

Slot Machine Winners: Reclaim Taxes On Your Slot Machine Winnings

Is There A Strategy For Winning At Slot Machines?

Slots are the most commonly played game at US casinos, and slot machines are the most commonly taxed casino game. But, before taxes are taken off from your slot machine winnings, you will have to hit a slot jackpot.

Unfortunately for slot aficionados, there is no strategy for winning at slot machines. All slot payouts and slot jackpots are strictly random, and based on the casino's algorithm programming, and obviously luck. Some superstitious gamblers think there is a grand strategy for winning at slot machines, but unfortunately even the most experienced slot machine player cannot discern between a winning slot machine and one that regularly throws up lemons.

How Do You Locate The Best Slots In Vegas And Other US Casinos?

US casinos often place their cheapest and/or most popular slot machines in strategic locations. Sometimes casinos put their nickel slot machines in front to attract gamblers, akin to a loss leader at the front entrance of a grocery store. Or conversely, casinos may locate their most sought-out slots deep inside the casino to invite gamblers past a number of other slots and/or table games. A winning slot machine could be located anywhere, but there are constant rumors about some slot machines being luckier than others. Las Vegas slots are everywhere, but the best slots in Vegas are the object of rumor, and cannot be pinpointed.

Why Do Canadians Gamble At American Casinos And Their Slot Machines?

It is all about higher chances of slot machine winnings at US casinos. American jurisdictions generally have minimum slot payout percentages as opposed to casinos in Canada. Casinos within close proximity to each other (e.g., casinos on The Strip, casinos within Las Vegas, and casinos within Atlantic City) are also forced to compete against each other. In order to attract and keep their gambling customers from wandering to the casino next door, American casinos generally give their patrons higher percentages of slot jackpots. Gamblers are not clueless, and via experience and word of mouth, they end up gravitating towards the casinos which provide higher slot payouts. Competition amongst casinos in the US (and especially in the 3 largest gambling states of Nevada, New Jersey, and the Mississippi) is a lot higher than in Canada. Canadian casinos can rely on a captive local market, and do not have as much of an incentive to give better slot payouts, whereas the major American casinos fight bitterly to attract and keep their patrons.

Gambling at random Las Vegas slots may not be as potentially lucrative as playing at the best slots in Vegas, but it is still a better proposition than playing at a local Canadian casino. It is not surprising that Canadian gamblers travel to the United States by the bus and planeload every day.

How Do You Calculate Tax On Slot Machine Winnings?

In the United States, every slot machine jackpot of $1200 USD or more has 30% slot tax deducted from the original slot machine winnings. For example, if you win $1199.99 USD or less, you will receive 100% of your slot machine winnings. But, if you win a $1200 USD slot machine jackpot, the US casino will only pay you $840 USD ($1200 USD X 30% slot tax rate), and the casino forwards the remainder ($360 USD) as withheld slot taxes to the IRS. Similarly, if your slot jackpot is $3000 USD, you will have $900 USD ($3000 USD X 30% slot machine tax rate) deducted from it.

Luckily, as a Canadian, you are also entitled to deduct gambling losses in the United States from your US gambling winnings. Same-year US gambling losses that are equal to or greater than your gross slot winnings means you are eligible for a full American tax refund. For example, if you hit a $1200 USD slot jackpot, the IRS will deduct $360 USD as 30% slot taxes. If you have $1500 USD in same-year US gambling losses, you are entitled to receive a tax refund for the entire amount of your withheld slot jackpot winnings.

If your slot machine winnings are higher than your same-year US gambling losses, you are eligible for a partial tax refund. If you have won a $1200 USD slot jackpot, but have $1000 USD in same-year US gambling losses, your gambling losses can partially offset your gambling income. A $1200 USD slot machine jackpot automatically has $360 USD ($1200 USD X 30% taxes on slots) deducted as withheld slot machine taxes. The $1200 USD gambling win minus the $1000 USD gambling loss would entail a taxable amount of only $200 USD. A 30% slot machine tax rate means you should have only paid $60 USD in US taxes. Since the casino withheld $360 USD on your slot machine jackpot, you can expect to receive a $300 USD tax refund.

To make things even more complicated, some Indian tribal casinos and gambling establishments in the United States may assess the 30% withholding tax on all slot machine winnings (without the need to meet a specified threshold) for US non-residents. However, the rules for deducting US gambling losses from your slot machine winnings still apply, and you can claim a partial or full refund of the gambling taxes withheld by the IRS.

Since you can deduct US gambling losses from your US slot machine winnings, you should document all of your gambling activity while gambling in the United States. You should note the dates and locations of your US casino gambling, what games you have played, and the amounts you have won and lost.

International gamblers from treaty countries can apply to receive a full IRS tax refund. Unlike Canadians, there is no need to record gambling losses and deduct them from the slot machine winnings. The opposite is true for international gamblers from non-treaty countries. Gambling loss records must be kept to apply for a partial or full gambling tax refund.

Slot Machine Winners: How Can US Gambling Refund Help You?

Dealing with the IRS can be a difficult process when trying to claim back your withheld taxes on slots. US Gambling Refund can ensure a painless and efficient tax refund from the IRS. We have the knowledge and expertise with both US and Canadian tax laws. Our easy-to-understand application only takes about 5 minutes to complete. We guarantee that you receive the maximum tax refund possible, with minimum fuss and delay. Obtain a tax application package from us and recover your withheld slot taxes.