Quote:
Originally Posted by encapsulated
For smaller payouts for tourneys - the most I've won was roughly 4k at Borgata - no W2G was issued and no money were withheld for tax purposes - they simply asked if I wanted chips or cash. In turn, I thought that W2-G are only issued and have taxes withheld only if you won over a certain amount.
In my case - should money had been with held and I be issued a W2-G and Borgata simply didn't?
For example, $600 buyin Borgata Open:
110th - 100th Place gets paid 5500 - No Tax - $4900 Profit - No W2-G issued/Nothing is withheld for tax purposes.
99th - 90th Place gets paid 6000 - 33% Taxed (5400 Profit) - W2-G issued + 1782 is withheld for tax - Remaining profit - 4218
Are players better off busting between 110 - 100th than 99-90th?
You are mixing up what is taxable with what is withheld.
* If you win $1-$4999 at a tournament (net of the entry fee), you owe tax on it, but the casino won't withhold anything, you just have to report it on your tax forms (and pay the required tax).
* If you win $5000 or more in a tournament (net of the entry fee), you also owe tax on it, but in this case the casino will withhold 24% of your winnings and issue you a W-2G. You will report your winnings in the same way on your tax forms, but now will also report the amount shown on your W-2G as withholdings, so you likely will not owe any additional taxes for that win. You will still owe taxes on any other gambling winnings, though.
So no, you are not "better off" (in a legal sense) winning 110th place than 99th place, because you will owe taxes on your winnings either way, whether they are withheld for you or not.
If you are not planning to pay taxes, you may be better off, but that is tax evasion and an illegal activity, and discussion of it is not permitted here on 2+2.
Hopefully that answered your question.
