Gambling Taxes - What You Should Know
One of the main issues that gamblers have is that there are many countries in which gambling income is taxable or seen as taxable income. That means that, on top of having to deal with the house edge of an online casino or a land-based casino, players would need to spend extra money on the cash that they win to pay the government. That’s on top of all the added expenses that come with gambling!
That doesn’t mean that gambling is not worth it, though.
There are ways in which you can avoid paying too much taxes on your gambling income. In this guide, we aim to give you a full breakdown of how to do it without crossing the line between what’s legal and what’s not. Our aim so to provide you with tips on how to pay fewer taxes on your gambling income without putting you in peril of breaking the law.
Do keep in mind, however, that some of these methods are frowned upon. Make sure that you don’t break any laws while looking to make the best of your time in the world’s best online casinos and as you aim to keep all of the cash that you want to win.
Do You Need to Report Gambling Winnings?
It all depends on the local laws of your country and how things work in your national legal environment. There is no straight answer that we can give you to this question because every country has different laws. In fact, these laws vary so much that the answer might depend on the type of gambling winnings that you make – be it on online casinos or land-based casinos.
With that said, it’s much easier to avoid paying taxes in online casino winnings than it is to avoid doing so in land-based casinos. Local casinos in your city probably struggled to obtain licenses (governments can be extremely picky when it comes to this). As such, they will make sure not to lose them by any means possible, and that also means that your winnings and losses are likely going to be reported to the government.
Bitcoin Gambling and the Art of Avoiding Taxes
The best bitcoin casinos in the world give the player a ton of advantages that makes bitcoin gambling much more profitable than regular casino gambling. Monetary transfers are done much quicker in bitcoin casinos, bonuses tend to be much more lucrative, and the tournaments that bitcoin sites host tend to be much more profitable than those found in regular online casinos.
Those aren’t the only benefits of playing in a bitcoin casino, though. It’s much more difficult to tax bitcoin winnings and losses. In fact, it’s impossible to tax it unless you turn your bitcoins (or any other cryptocurrency) into dollars or currency that is being regulated by the banks of your country. That's why gambling winnings and losses are also much harder to track when gambling with crypto.
Of course, keeping the cash in the form of bitcoins and not reporting it to your country’s authorities can technically get you in trouble, but since bitcoins are not easily tracked and it’s not easy for the tax agencies to get their hands on bitcoin transfer information, you’re likely going to walk away free.
As such, we strongly recommend you play in the best bitcoin casinos if you want to avoid paying too many taxes on your winnings and avoid gambling losses. You might even be able to not pay anything at all if you know how to handle yourself well!
Countries Legislations, Laws, and the Importance of Know-How
It is very important that you know the laws of your country or state regarding gambling legislation and how money needs to be declared if you want to avoid getting in trouble but if you also want to pay as little in taxes as possible. It might be best for you to travel to another country and wager there if you want to avoid paying taxes altogether.
In fact, if you would like to play in high roller casinos and you have the option to move to another country, the best thing you can do is go look for a place to live in Canada. Gambling winnings don’t need to be reported there!
Avoiding Versus Evading – Know the Difference!
Before we dive into the tips of how to avoid paying as much taxes on your gambling winnings as you’re probably paying right now, we would like to clarify that we see a huge difference between avoiding and evading. One of these terms is within what you can say is legal, but the other is not. Avoiding taxes means finding ways to pay less, but keeping things within what’s legal.
However, evading is probably going to get you in trouble unless you’re a high-profile figure. In any case, the list of tips that we’re going to provide you is going to help you avoid paying too much cash on taxes. None of these methods is anything too crazy and none should get you in trouble as long as you declare everything (including gambling losses) as close to what really happened as possible.
Ways to Avoid Paying Tax on Gambling Winnings
We have compiled a list of 6 tips to help you reduce the amount of money that you’ll end up paying in taxes in the long run. Use them wisely and be sure not to break any of your country’s laws if you want to stay within the margin of legality, though.
1. Always Report Your Losses – And Do So as Much as Possible
Perhaps the best way to avoid paying too much cash in gambling taxes, reporting your gambling losses goes a long way into reducing the total amount of cash that you have to pay as a gambler. If you report all of the cash that you’ve lost as gambling losses, then it will be deducted from the amount of cash that will be legally taken away.
This is a method that works in the US, but it’s also an accepted and legal way to reduce your taxable income in many other countries in the world. Do keep in mind that, in most countries where you can report your gambling losses, that means that gambling income is taxable. You might not be able to report your gambling losses if gambling income isn’t taxable. It goes both ways, but it depends on country laws.
2. Be Careful When You Gamble in the US
If you truly want to avoid paying too much taxes in gambling winnings after calculating gambling losses, the best thing you can do is not to gamble in America due to federal income tax laws. The United States is a country with some of the heaviest taxation laws on the planet, and it’s even worse when it comes to gambling. You end up having to pay almost half of your winnings in taxes, which defeats the concept of getting excited after earning some cash.
The only advantage is that Americans are allowed to report their losses as part of the reduction process, but still – it can be very annoying to gamble in the US knowing that a lot of your money is going to end up being taxes. Even though winnings and losses qualify for your tax return, it's still difficult to properly profit from gambling in America.
If you're going to gamble in the United States, we recommend you do it with cryptocurrency. Gambling winnings and losses with bitcoin or any other crypto are out of the banking system and therefore not related to anything that the IRS requires, which means that they aren't trackable by the state. Gambling winnings and losses are usually part of the system's income - do you see why governments want to impose crypto regulations?
3. Look for Countries Where Gambling Winnings aren’t Taxed – Especially as a High Roller
If you’re a high roller and you can afford to live elsewhere, there’s no better way to start your journey than moving to a country where you can freely spend your money and win cash by gambling without having to fear for the authorities taking your cash away. For example, if you live in the US, moving away means that you're going to have less trouble complying with anything that the IRS requires - even if US citizens still need to pay income tax regardless of where they live.
A country like Canada is an excellent choice if you want to move away from your country and towards a first-world nation where you can freely spend your cash in casino games without having to pay any of your winnings to the government.
4. Keep Records of Everything and Show them to an Expert
Another great way to avoid getting in trouble and minimizing the total amount of cash that the government can take from your gambling income is to keep records of everything - including gambling losses. Make sure you report as a loss everything that happens in your account or in your time as a gambler: fees, transactions, minor losses – report everything.
The only way to make sure that you won’t forget what to report gambling winnings or gambling losses is to always keep track of all bets that you make. Keep something to write everything down and never miss out on any of the cash that you’ve spent – that way, you can report everything as a loss and you’ll be able to save a lot of money in the long run.
Even if your country has a federal tax, you may be able to get money back even if certain procedures may be required to get it.
5. Stick to Legality – You Won’t Want to Get in Trouble
We cannot stress things enough: make sure to remain within the margin of what’s legal - especially if you're aiming to be a professional gambler. There’s nothing more detrimental to your economic future than being tagged as a tax evader! Remember that there’s a huge difference between avoiding and evading. Stick to what’s legal and make sure not to do anything that could get you in trouble when reporting gambling losses.
Again, knowing the laws of your country plays a huge part in keeping yourself out of any issues.
Make sure that reporting gambling income is absolutely necessary before you do it and make sure to find ways to reduce the amount of cash to report to as little as possible. Taxation laws can be very tough, but that doesn’t mean that it’s impossible to avoid paying a huge sum of cash in taxes – especially if you’ve earned yourself a large win in an online casino.
6. Talk to a Specialized Accountant
The easiest way to avoid paying too much in taxes as a professional gambler, albeit one of the most expensive ways of doing so, is by talking to a specialized accountant who knows a thing or two about gambling income. You’d be surprised, but there are accountants who make a living on helping people reduce the amount of cash that they have to pay on gambling winnings by declaring their income in different ways.
You do need to make sure that the person that you speak to is a specialist, though. You might come across some accountants that tell you not to worry and that your money is in good hands whilst in reality, they don’t know what they’re doing. Besides, you also need to put into perspective whether it’s worth paying an accountant or not.
Some accountants charge a lot of money to help you do this, and if your winnings are minimal, you might as well not spend the extra cash. An accountant should always take the blame if they tell you to do something that you shouldn’t be doing.
You need to keep records of your conversations between you and your accountant to make sure that you have legal grounds for defense if they do anything that they shouldn’t be doing and something that could get you in trouble.
An accountant should help you add gambling losses to your tax returns. Winnings and losses, when taking into account, will allow you to deduct gambling losses even when considering gambling as part of your income tax.
The Best High Roller Online Casinos
High rollers are the types of players that tend to make the largest profits in the iGaming world, partly because they can put the gambling odds as close as possible to their favor as the online casino industry allows. We know that playing in the best online casinos is part of what makes an iGaming experience one of the best out there, so we’ve made a list of the best high roller casinos to help you out.
Note that all of these casinos are also home to the best high roller casino bonuses in the world. You will be able to obtain sums of cash that surpass the thousands of euros worth of cash, or you can obtain free spin bonuses that will allow you to play the best games in the world completely for free.
Regardless of what you’re looking for, these casinos guarantee you the best chances to make a profit in the iGaming world. First thing that you need to do is win money for it to become taxable income. Make the best of the sites!