For the sake of a concrete example, here are my circumstances (filing jointly):
2017 itemized deductions were $25000. Taxes paid to state and local authorities (referred to as SALT - state and local taxes) were $15000.
Under the 2018 SALT cap of $10000, I'll lose the benefit of $5000 in tax deductions. My allowable itemized deductions are reduced to $20000. In absence of gaming activity, I would take the standard deduction of $24000, gaining $4000 in deductions.
Now, let's add some modest gaming activity and presume that during the year $12k in w-g jackpots were hit, that these wins are reported as gross winnings, and that overall gaming activity netted a loss (so a offsetting gaming loss deduction of $12k is taken).
Here's where things get a bit ugly. Yes. gaming losses can be declared to the extent of going wins, thus a wash in this case. However, to the extent that total itemized deductions are increased to the $24000 standard deduction through declared gaming losses, the benefit of otherwise taking the standard deduction is reduced $ for $.
In the above example, the added $4000 deduction benefit (via the standard deduction) is lost with the first $4000 in gambling losses. Assuming a 35% marginal tax rate, gambling activities impose an effective tax penalty of $1400.
---In vpFREE@yahoogroups.com, <onetime7500@...> wrote :
Since gambling losses are not subject to the 2% AGI floor, they are still allowed under the new law.
The problem for many folks will be the much higher $24,000 standard deduction if married, $12,000 if single. If you need to deduct losses, you will miss out on this higher standard deduction. Given that state and local taxes are limited to $10,000, this is likely to be a hidden tax on gambling for many people.
The problem for many folks will be the much higher $24,000 standard deduction if married, $12,000 if single. If you need to deduct losses, you will miss out on this higher standard deduction. Given that state and local taxes are limited to $10,000, this is likely to be a hidden tax on gambling for many people.
__._,_.___
Posted by: harry.porter@verizon.net
| Reply via web post | • | Reply to sender | • | Reply to group | • | Start a New Topic | • | Messages in this topic (8) |
Have you tried the highest rated email app?
With 4.5 stars in iTunes, the Yahoo Mail app is the highest rated email app on the market. What are you waiting for? Now you can access all your inboxes (Gmail, Outlook, AOL and more) in one place. Never delete an email again with 1000GB of free cloud storage.
.
__,_._,___
