Harry, I don't collect SS so I haven't any knowledge how that's affected by W2g's yet. But, anyone who likes money likes $1200 & above winners, and I certainly welcome as many of those as I can get.
Are you saying that there comes a point where winning that much might cost the player more than the jackpot's worth in tax liability?
----- Reply message -----
From: "vp_wiz" <harry.porter@verizon.net>
To: <vpFREE@yahoogroups.com>
Subject: [vpFREE] Re: FSP strategy ideas
Date: Mon, Jan 23, 2012 10:17 am
the7thwarrior wrote:
>
> When those w-2g's start effecting your Social Security income they no longer represent real profit. If your AGI is too high you start losing benefits. This is usually only the case for those collecting those benefits. Otherwise it only effects your deductions on Schedule A.
> Sure you get to write off gambling losses against winnings, so for
> the younger crowd it is not an issue.
This only begins to describe the tip of the iceberg. There are a wide range of exemptions, deductions, credits and other tax related items that are reduced/limited by Adjusted Gross Income above specified caps (AGI = essentially, income before deductions).
Reported W-2G income serves to inflate AGI without the benefit of offsetting loss deductions, with a consequence to many that they end up paying more tax when gaming activity is accounted for, even in absence of a net win.
Fortunately, a good number of such AGI limitations lapsed from the tax code with 2009. But enough remain that it's something about which any prudent player should remain circumspect.
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