- What About Gambling in The USA Or Vegas As a Canadian Citizen? Unfortunately, US Citizens have to pay almost half of any gambling winnings to the tax man. If you head over to the land of the red, white and blue to gamble, you will have to pay taxes on anything over $1200 USD. If you think you can just not declare it, think again.
- Income Tax on World Series of Poker Winner. You probably heard from any of your favourite Canadian news sources that Jonathan Duhamel, 23 year old from Canada has won the World Series of Poker in Las Vegas. The winning awards him US$8.9 million in prize money.
In other countries, like Kenya and Ireland, players aren’t taxed on their winnings, but bookies must pay a certain percentage of taxes on the total bets or winnings they record. In Ireland bookies must pay 1% on all bets placed through them, while in Kenya bookies have to pay 7.5% tax on all winnings they record.
Tips for Claiming Tax Back from US Casino Winnings
You won big in Las Vegas, Atlantic City, Reno, or one of the other gaming destinations in the U.S. Once you win a jackpot, you’re faced with a very unpleasant revelation: you are immediately taxed on your winnings. However, Refund Management Services advises that there is a way to get all or a portion of your taxes back from the IRS.
You can win a lot of money gambling in the United States. Of course, that means you’re also subjected to a casino winnings tax.
If you’ve made a trip to the U.S. and your gaming winnings are high enough or you win a prize and take the cash equivalent, the IRS will deduct 30% off of your winnings. Nobody wants Uncle Sam to withhold their winnings.
Still, there’s no reason to avoid the gaming tournaments or slots when you’re south of the border. Here is what you need to know about before you travel to the US to gamble and how to claim and get tax back from us casino winnings.
- Once your US casino winnings pass a certain threshold (which differs by casino, but is often $1,199) you will be subject to withholding tax. When this happens, you will be issued a W2-G or 1042-S slip.
- Don’t wait more than three years to claim gaming winnings on a tax return; that said, if you’ve won in the current year, we will be filing a claim at the beginning of the next calendar year. Most of our customers typically contact us within a few days of returning to Canada or their country of origin, so we can begin preparing the paperwork for them to get the refund that is rightfully theirs. If you delay submitting your claim, you won’t be entitled to a refund after 3 years.
- Keep track of all your US wins and losses every time you go, reporting your losses will maximize your return.
- It’s not just US casino winnings that are taxed, other gaming activities can be taxed like lotteries, raffles, and races.
- Remember that you can also claim taxed gaming winnings on a variety of games, such as lotteries, raffles, and horse races.
- When it comes to getting tax back from US casino winnings, you have a few options:
How To Get Tax Back From US Casino Winnings
Nearly four million gamblers win big in gambling cities across the U.S. and the IRS deducts taxes from all of them. However, as a non-resident of the U.S., there is a way to get your casino winnings back from the U.S. by hiring Refund Management Services to go through the process of obtaining a casino winning tax refund from the IRS. RMS is the easiest way to get your money back.
If you win $1,199.00 or more, contact Refund Management Services and we will obtain your taxed gaming winnings by filing a tax return. Take the stress out of the process by letting our trained experts handle it for you!
At the end of the day you have two options:
Option 1: Claim Tax Back from US Casino Winnings On Your Own
It is possible to file your own withholding tax return. While this may save you a small amount of money, it is only advised if you feel confident in your withholding tax filing skills. Much like your annual tax return, with so many opportunities to leave money on the table or make costly mistakes, claiming tax back from US casino winnings on your own can leave you in a costly position. Every year we deal with clients who have been denied their withholding tax refund by the IRS after filing independently. It is complicated, time consuming, and expensive to appeal this decision, so it’s often not worth the risk.
Option 2: Use a Withholding Tax Refund Professional
These folks make it their business to get your tax back from US casino winnings. Although there is a fee associated to using a withholding tax professional, they will ensure you don’t make any costly mistakes. To make sure you make the right choice, look for the following in your withholding tax professional:
1. Relationships with Casinos & Gaming establishments:
To start your claim process, you will need the IRS form 1042 from the casino you were playing in. If you misplaced it, that won’t be a problem for a reputable withholding tax refund professional since their relationship will allow them to easily recover it from the casino you were playing in. Even if you haven’t misplaced your form 1042, this is still a good quality to look for in your withholding tax refund professional.
2. Honest About Your Refund Timing
Although speed is of the essence when you’re looking to get your refund, due to the IRS wait times it is important to know that you’ll be waiting 6 months at a minimum but usually a full year before receiving your US casino winnings tax back. This is AFTER the claim is submitted. Any agency that tells you you could receive your US casino winnings tax back sooner is being misleading to get your business.
3. Agent of the IRS
Agents of the IRS are people or companies that are allowed to certify your ID, a requirement when claiming tax back from US casino winnings. This means one less chore for you when making your claim.
4. Excellent Track Record For Claim Approvals
The firm you use to claim tax back from your US casino winnings should boast at least a near perfect record when it comes to rightful claim approvals.
5. Owned and Operated by a Canadian Chartered Accountant
When claiming your tax back from US casino winnings, ensure the withholding tax specialist is a Canadian chartered accountant. This ensures your return is being handled by people with the appropriate expertise to be handling taxes. It will also provide you with insurance that your sensitive information will be handled professionally.
6. A Withholding Tax Industry Veteran
We are the longest standing withholding tax agency in the industry for a reason. Avoid leaving your refund in the hands of someone less experienced by choosing a withholding tax specialist who is tried, tested, and true.
7. Makes Casino Winnings Tax Refunds Easy
If you find you’re filling out multiple forms, your withholding tax professional is not earning their fee. The point to using a service when getting tax back from casino winnings is that they do all the leg work and make sure it’s done right.
RMS is the leading provider of withholding tax services for non-US residents. Learn why RMS is the right choice for claiming tax back from your US casino winnings and apply now for free.
Tax burdens can cut poker winnings in half. And that’s exactly what they’ll do, even in tournaments as large, and with as big a payout, as the 2016 World Series of Poker final table.
Taxes On Online Poker Winnings
Then, once you move into tournament backers who receive a part of the action from investors to lower player risk, players only see a portion of their winnings.
In a post titled, “The 2016 Real Winners of the World Series of Poker,”Russ Fox of Clayton Financial and Tax in Las Vegas, divvies out the winnings, based on how much is taken out, location and what the player will receive after taxes.
| Player | Location | Place | Percentage Lost | Winnings Before Taxes | Winnings Lost | Estimated total |
| Qui Nguyen | Las Vegas, NV | 1st | 41.51% | $8,005,310 | $3,324,157 | $4,681,153 |
| Gordon Vayo | San Francisco, CA | 2nd | 51.46% | $4,661,228 | $2,398,800 | $2,262,428 |
| Cliff Josephy | Long Island, NY | 3rd | 48.40% | $3,453,568 | $1,674,568 | $1,779,000 |
| Michael Ruane | Maywood, NJ | 4th | 45.75% | $2,576,003 | $1,178,525 | $1,397,478 |
| Vojtech Ruzicka | Prague, Czech Republic | 5th | exempt, flat 15% income tax | $1,935,288 | $290,293 | $1,644,995 |
| Kenny Hallaert | Hansbeke, Belgium | 6th | 0% (no tax on gambling wins) | $1,464,258 | $0 | $1,464,258 |
| Griffin Benger | Toronto, Ontario, Canada | 7th | 30% withheld for U.S. income tax | $1,250,190 | $370,057 | $875,133 (can file return to recover losses) |
| Jerry Wong | Margate, Florida | 8th | 38.16% | $1,100,076 | $419,776 | $680,300 |
| Fernando Pons | Palma, Spain | 9th | 45% | $1,000,000 | $449,584 | $550,416 |
Here’s a table from the post:
| Amount won at the final table | $25,445,388 |
| Tax to IRS | $8,108,024 |
| Tax to Franchise Tax Board (CA) | $623,262 |
| Tax to Agencia Tributeria (Spain) | $449,584 |
| Tax to New York Dept. of Taxation and Finance | $422,752 |
| Tax to Finanční Správa (Czech Republic) | $290,293 |
| Tax to New Jersey Division of Taxation | $215,845 |
| Total Tax | $10,109,760 |
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