3 ms·

Or tax it highly enough that you can afford to mitigate some of the societal ills without driving the market underground.

dgfitz 2y ago
Fwiw, for reasons I don’t question, I’m up about 7800% with online sports betting. I regularly cash out, and claiming the winnings on taxes is painful. It wipes out whatever tax write offs you thought you had.
- lotsofpulp 2y ago
  Why is paying income tax on income from gambling painful?
  - orangecat 2y ago
    It's basically a case of heads you win 60%, tails you lose 100%. In almost all cases the taxes that you're required to pay on winnings is much more than the writeoff that you can get from losing, e.g. https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you-claim-gambling-losses-on-your-taxes/L4lQ3IAWt https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you...
    - lotsofpulp 2y ago
      I cannot imagine how it would benefit society to provide full deduction of gambling losses, and can conceive of avenues for corruption to expand if it were offered.
      - andy800 2y ago
        That's true but the complaint that gamblers have (at least those who pay taxes in the US), if you win a big jackpot in January, say $10,000, and over the course of the year you lose all $10,000 so that you're even, you still have to pay tax on the jackpot (as normal income) but can't reduce the amount by the subsequent losses. Yes there is some ability to deduct some losses as expenses but it's not an even trade. It's hard to win at gambling, much harder the way the US tax code is structured. Keep in mind that many countries don't tax gambling winnings at all, so many people feel the US rules are unfair from the start.
        andy800 2y ago
        Too late to edit my own comment but technically it is incorrect. If you keep meticulous records of the offsetting losses, the IRS may allow you to claim zero gambling income in that fiscal year and relieve you of having to pay tax on income. What I stated above is true across fiscal years. If you win a $10,000 jackpot on December 31, and lose all $10,000 on January 1 (or at any point over the next 12 months), the above comment is true. You don't get to reduce your income in the next year by the $10,000 of losses, or edit the previous year's return, or offset the earlier win in any way.
        dgfitz 2y ago
        If I’m at the point, as a hobbyist sports gambler of keeping meticulously accurate records, I’m no longer a hobbyist.
  - dgfitz 2y ago
    I could shorten that to “why is paying income tax painful” but if you don’t understand taxes, it’s like a micro version of winning the lottery, you don’t get all of it. Or were you just being a prick?
    - lotsofpulp 2y ago
      > I could shorten that to “why is paying income tax painful Yes, that was my point.
      - dgfitz 2y ago
        Welp either I’m dense or you didn’t make a point. We can go with the former. Cheers.
        lotsofpulp 2y ago
        Sorry, I just meant the original comment sounded like there was something especially onerous about income taxes on gambling winnings compared to tax on other types of income.
        dgfitz 2y ago
        I dunno, it’s hard to describe. Imagine $10,000 on $47 and realizing that half that money never existed. I don’t mind paying the taxes on it, but claiming gambling winnings basically defeats any sensible financial tax strategy. I think I’m the only person I know who claims them. I’m about to give it up because I never needed the money, it’s just fun to beat the house. The taxes really do suck.
        lotsofpulp 2y ago
        You’re right, this website educated me on some of the inconsistencies/drawbacks compared to other income: https://www.lhd.com/the-edge/if-you-are-a-recreational-gambler-here-are-some-tax-issues-you-need-to-know/ https://www.lhd.com/the-edge/if-you-are-a-recreational-gambl...
- tmiku 2y ago
  I doubt that OP is talking about taxing player winnings. He's probably referring to taxing the betting companies. Anyway, I'm sorry you had to pay income tax on the income you made. Truly painful.
  - dgfitz 2y ago
    I hope you feel silly.
deleted 2y ago
[deleted]

dgfitz 2y ago

Fwiw, for reasons I don’t question, I’m up about 7800% with online sports betting. I regularly cash out, and claiming the winnings on taxes is painful. It wipes out whatever tax write offs you thought you had.

lotsofpulp 2y ago
Why is paying income tax on income from gambling painful?
- orangecat 2y ago
  It's basically a case of heads you win 60%, tails you lose 100%. In almost all cases the taxes that you're required to pay on winnings is much more than the writeoff that you can get from losing, e.g. https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you-claim-gambling-losses-on-your-taxes/L4lQ3IAWt https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you...
  - lotsofpulp 2y ago
    I cannot imagine how it would benefit society to provide full deduction of gambling losses, and can conceive of avenues for corruption to expand if it were offered.
    - andy800 2y ago
      That's true but the complaint that gamblers have (at least those who pay taxes in the US), if you win a big jackpot in January, say $10,000, and over the course of the year you lose all $10,000 so that you're even, you still have to pay tax on the jackpot (as normal income) but can't reduce the amount by the subsequent losses. Yes there is some ability to deduct some losses as expenses but it's not an even trade. It's hard to win at gambling, much harder the way the US tax code is structured. Keep in mind that many countries don't tax gambling winnings at all, so many people feel the US rules are unfair from the start.
      - andy800 2y ago
        Too late to edit my own comment but technically it is incorrect. If you keep meticulous records of the offsetting losses, the IRS may allow you to claim zero gambling income in that fiscal year and relieve you of having to pay tax on income. What I stated above is true across fiscal years. If you win a $10,000 jackpot on December 31, and lose all $10,000 on January 1 (or at any point over the next 12 months), the above comment is true. You don't get to reduce your income in the next year by the $10,000 of losses, or edit the previous year's return, or offset the earlier win in any way.
        dgfitz 2y ago
        If I’m at the point, as a hobbyist sports gambler of keeping meticulously accurate records, I’m no longer a hobbyist.
- dgfitz 2y ago
  I could shorten that to “why is paying income tax painful” but if you don’t understand taxes, it’s like a micro version of winning the lottery, you don’t get all of it. Or were you just being a prick?
  - lotsofpulp 2y ago
    > I could shorten that to “why is paying income tax painful Yes, that was my point.
    - dgfitz 2y ago
      Welp either I’m dense or you didn’t make a point. We can go with the former. Cheers.
      - lotsofpulp 2y ago
        Sorry, I just meant the original comment sounded like there was something especially onerous about income taxes on gambling winnings compared to tax on other types of income.
        dgfitz 2y ago
        I dunno, it’s hard to describe. Imagine $10,000 on $47 and realizing that half that money never existed. I don’t mind paying the taxes on it, but claiming gambling winnings basically defeats any sensible financial tax strategy. I think I’m the only person I know who claims them. I’m about to give it up because I never needed the money, it’s just fun to beat the house. The taxes really do suck.
        lotsofpulp 2y ago
        You’re right, this website educated me on some of the inconsistencies/drawbacks compared to other income: https://www.lhd.com/the-edge/if-you-are-a-recreational-gambler-here-are-some-tax-issues-you-need-to-know/ https://www.lhd.com/the-edge/if-you-are-a-recreational-gambl...
tmiku 2y ago
I doubt that OP is talking about taxing player winnings. He's probably referring to taxing the betting companies. Anyway, I'm sorry you had to pay income tax on the income you made. Truly painful.
- dgfitz 2y ago
  I hope you feel silly.

deleted 2y ago

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