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Online gambling was legalized in 2008, but detailed regulations weren’t set until 2012. Official Bulgarian gambling sites were introduced in 2013 along with a new tax on turnover for online casino operators. Online gambling winnings in Bulgaria are tax-free, just like with land based casinos there. The answer is yes, but the good thing about gambling tax law for big winners is that, unlike income taxes, gambling taxes are not progressive. Whether you win $1,500 at the slot machine or $1. Illinois’ impending sports betting launch coincides with national Problem Gambling Awareness Month. It also happens to fall in the heart of tax season, and yes, Uncle Sam gets a cut of the action.

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Gambling is fun. Taxes are not. Unfortunately, the two have to go together for anything to happen.

IXBET is an example of the betting sites the punters were using. The betting site had no withholding tax but the government had closed down the company’s pay bill number so punters could not deposit via either M-Pesa or Airtel Money. Gambling Income Tax Requirements for Nonresidents. Nonresidents can usually report income that is 'effectively connected' with a U.S. Business on Form 1040NR-EZ. Gambling winnings, however, are considered to be 'not effectively connected' and must generally be reported on Form 1040NR. Such income is generally taxed at a flat rate of 30%.

The truth of the matter is that for states like Michigan, the only real reason to legalize any form of gambling is the opportunity for tax revenue. Whether it be to pay for schools, roads, or some other unspecified project, most governments are always on the lookout for a new revenue stream.

Paying any taxes stings, to be sure. However, it’s important that you know how and when the taxman might come when you visit one of Michigan’s casinos. So, here is a guide for how taxes apply to Michigan gambling.

What is taxable in Michigan?

Throwing money around in a casino rarely seems like an official transaction. Whether you win or lose, the final disposition of your chips can often feel like a stitch in time.

Unfortunately, it’s not. All winnings that you realize in a casino are taxable as income, both on the state and federal levels.

So, you should be reporting those wins on your annual tax returns. Though many people scoff at the notion of reporting cash income to the government, it counts the same as income from a check or direct deposit in the eyes of the taxman.

Failure to report your gambling income could, in theory, land you in hot water with the Internal Revenue Service (IRS) or the state of Michigan’s tax office. In practice, those entities are unlikely to audit someone over a few hundred or thousand dollars, but that doesn’t mean that they can’t or won’t do so.

Also, please take note that non-cash winnings, like cars, boats, or other objects that you may win at a casino are subject to taxes too. The value that has transferred to you because of the win has increased your financial position, and the government wants its share of the loot. As a side note, game show prize winners have to do the same thing.

What taxes will I have to pay in Michigan?

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Now that you’ve steeled yourself to the reality of giving away a portion of your sweet winnings to the government, you may be wondering who and what you’ll be forced to pay. As indicated earlier, you will be compelled to pay percentages to both the IRS and the state of Michigan for your wins there.

The IRS, for its part, will demand that you fork over 25% of your winnings to the feds for your troubles. This rate applies to wins of any size, so even if you win just a dollar, you’ll still need to throw a quarter at the taxman.

In addition, Michigan law requires that you pay an additional 4.25% to the folks in Lansing for having played in their casino. Even though the casinos themselves are the main wellspring of tax income for the state lawmakers, gamblers do not escape unscathed.

For smaller wins, you’ll essentially be on your honor to report your gambling winnings to the appropriate authorities. As stated earlier, it’s not legal just to stick the money into your pocket, but there’s no mechanism or watchful eye to force your compliance as you exit the casino.

That lack of oversight extends to wins up to $5,000. However, at that point, the casino itself is bound to collect 25% on the government’s behalf before it releases your winnings to you. Give the cage your name and Social Security number, and your tax bill will be settled before you leave the property.

Obviously, losing 25% off the top is a kick in the teeth, but please don’t get any ideas about simply withholding your name and SSN. As it turns out, anyone who refuses to provide their information (for any reason) will be subject to an additional penalty of 3%.

Neither option is good, but bear in mind that the casino is not going to keep a cent of that money that it withholds. So, you might as well go along with it and live to fight another day.

If I never win $5,000, will I ever have to pay taxes upfront?

If you’re not a high roller, the idea of ever reaching the federal threshold for casinos to report wins might seem far-fetched. After all, if you usually bet in $5 or $10 increments, it’s quite unlikely that you’ll realize a win that exceeds $100, let alone $5,000.

So, you may be wondering if you’d ever have to worry about the feds ever knowing that you were gambling. Unfortunately, there are some other scenarios in which the casino might have to report your win to the IRS before handing you the proceeds from your hard-fought victory.

A casino must report a win to the IRS with Form W-2G if any of the following events occurs:

• The total winnings, or combined bet and profit, on a slot machine exceed $1,200.
• A player’s keno profit on a game is more than $1,500.
• A poker player wins more than $5,000 in a tournament.
• A game’s profit is more than $600 and is thirty times or greater than the bet amount.

Now, filing this form does not mean that the casino has to collect from your winnings automatically. However, since the government will soon be aware of your win, it would be foolish to omit it from your return. So, make sure to keep your copy of the form for your records.

The bottom line is that if you have a memorable win in a casino, it’s quite likely that the government wants to remember it, too.

How do I report my winnings?

It’s understandable that you might feel disappointed about having to pay taxes on your winnings. Nevertheless, in most cases, you’ll bite the bullet and decide to file. So, here’s how to do that.

As is the case for essentially anything to do with the IRS, there are forms to fill out. The first thing to do is report the income on the IRS Schedule 1, which is the form for additional income and adjustments to income.

On that form, look for Line 8 in Part I, which is entitled “other income.” Here is where you will list your winnings and their source. “Gambling” or “casino” are fine for explaining from where the money came in most cases, although you can be more specific regarding the casino and date if you’re worried about attracting attention.

Once you’ve entered the information onto your Schedule 1, you’ll need to put the same total onto line 7a of your regular tax return. You will then be able to add the winnings into your overall taxable income.

By the way, your Schedule 1 is also the place to list various types of deductions, like certain business expenses or student loan interest payments. So, make sure that you don’t miss out on all the different ways to knock down that taxable base.

Can I report gambling losses in any way?

Of course, gambling comes with the inherent chance of losing. However, you could understandably think that it seems unfair that the IRS only cares about your winnings. You may wonder if there’s a way to claim gambling losses on your taxes.

As it turns out, you can.

The IRS provides Schedule A as a form to claim various deductions. Although there’s no line expressly for gambling losses, you can list your setbacks in Box 16 – Other Itemized Deductions to claim them.

Now, there are two rules that go along with claiming casino losses on your tax form. The first, and most important, is that you cannot claim losses in excess of your claimed winnings.

So, if you list $1,000 in gambling winnings on your Schedule 1, the maximum that you could claim as losses on your Schedule A would be $1,000. If you had a bad year at the casino (as many of us do), the IRS does simply allow you to write off the loss as a deduction against your taxable base, unfortunately.

The other rule is that you must be able to prove your losses in some kind of meaningful way in order to claim them. It is vital that you keep records, receipts, and other documentation to show the losses, or the IRS might not accept the deduction as valid.

After all, that might be a handy way to offset your winnings from the year and avoid taxation, so the IRS has to be sure that you took the beating you claim to have suffered. The chance that the agency will take a harder look at you will increase as the dollar amount goes up, so if you’re a bit of a high roller, it’s a good idea to keep a paper trail for yourself.

If you’re thinking that record-keeping might be a pain, you can possibly make things easier by using your loyalty or membership card at your casino of choice when you play. Since they award you based on your play, they keep records of your play. It shouldn’t be too difficult to acquire a copy of your history from the casino.

For your Michigan tax return, it is not possible to claim any kind of losses as a deductible expense. However, the state does allow you not to report the first $300 you win on bingo, poker, or other games from your total household expenses.

Do I have to pay taxes if I don’t live in Michigan?

It’s pretty clear that you have to pay taxes to Michigan if you’re a Michigan resident. However, you may be wondering if you’re still on the hook for the taxes if you’re just visiting from out of state.

Unfortunately, you are still bound to pay taxes to Michigan for your gambling win as a nonresident. As is often the case, there’s even a form for that. Worse yet, you will also have to report your winnings on your return for your own state, assuming that your state requires an income tax.

However, there are a couple of bits of good news. First of all, the states nearest Michigan (Illinois, Indiana, Kentucky, Minnesota, Ohio, and Wisconsin) have reciprocal agreements with the Great Lake State regarding earnings that you incur in Michigan. If you live in one of those six states, you are not required to file a nonresident return in Michigan.

The other ray of sunshine is that there is, in fact, a tax credit that you will be able to claim on your home state’s return that will offset the taxes you paid in Michigan on your winnings. So, even though you had to fork over to a state in which you don’t live, you don’t have to pay double tax on the windfall. Although states are happy to collect tax revenue, they correctly realize that having to pay tax twice on the same win might lead citizens to decide it’s not worth the effort to play.

Do I have to pay taxes if I’m part of a group?

In many things, there is strength in numbers, and gambling is no exception. It’s not uncommon for a group of friends to pool their money so that they can roll a bit higher than they would individually. Whether they’re throwing in for a slot machine or on a lottery ticket, groups of people can often find themselves with a claim to a significant amount of winnings.

Unfortunately, taxes remain one of life’s surest things, and group wins are subject to taxation just as much as individual wins. As expected, there is a form for that.

If your group of friends scores big, you will need to fill out IRS Form 5754 to report the winnings for tax purposes. One of the group will have to designate himself or herself as the primary winner, and the other members of the group will have to note the share of the prize that they are claiming. So, if you hit it big with your buddies, you might need a calculator.

Once you’ve got the form filled out, send it to the IRS. If the win occurs at a casino, casino management might want a copy of the form for its own records, too.

Where should we begin when it comes to discussing the European online gambling market? The European market has seen its fair share of ups and downs, but also have led the way in the introduction of games, betting styles and platforms since the inception of the industry.

We are going to speak of the European market in general terms on this page; obviously, there are some significant differences in each individual country’s approach to online gambling.

For now, let’s review some of the essential common elements that anyone should be looking at when they are choosing an online gambling site to play from Europe.

Here Are Our Top Recommended European Online Gambling Sites:

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We review all the European-facing sites we can find, from the most established brands to the brightest of newcomers. Of course, every site is a little bit different, and many have restrictions depending on where you live. With that in mind, we encourage you to read our individual reviews to learn about each company in detail. To help you get started, we have compiled a list of our top 5 recommended European Gambling Sites above, which we are sure will offer you a fantastic experience.

There is no single answer to this question. With a region made up of so many different countries, it is not surprising to see that there are also various stances on online gambling. While the region is very advanced compared to North America regarding the legalities of online gambling sites, for many countries it is still a work in progress. In fact, the European gaming regulation map looks similar to that of the individual U.S. states.

In each of our individual country reports, you will get an in-depth review of that country’s regulatory environment. With the introduction of the European Union, it seemed like the collective wrote an onion about its stance on many topics, including gambling.

For the purposes of a general review let’s highlight a few in summary form:

The UK have long been operating in a regulated environment, and in fact, the Internet Gambling Act enforces the fact that to legally accept UK players, an online gambling website needs to apply for and receive a license from the Gambling Commission. This application process is rigorous, and the Gambling Commission does not look favorably at companies who have in the past accepted players from unregulated markets.

The Spanish Gambling Act was entered into law to help manage the federal oversight of regulated gambling, which was before that left up to the individual states. As a result of this legislation, operators can apply for a license that if received will allow them to legally accept Spanish players to gamble on all forms of online games.

The French also have a form of regulated online gambling, which allows licensed operators to allow sports betting, poker, and horse racing. Despite their love of card games, there is no option for obtaining a license to offer online casino games, so any operators who can provide those games in addition to poker and sports in other jurisdictions must shut them off for any players that come from France.

The Italian government looked to increase tax revenue and capitalize on the country’s love of soccer by introducing legislation to allow sports betting in the mid-2000s. This allowed anyone who acquired a license to take sports betting action either online or in a land-based retail environment. Amendments to that law over the years added other online betting options such as lottery, casino and poker and today Italians have a full range of products to select from when they are choosing an online gambling site.

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Of course, all these regulations are regularly updated, so it is important that you review this page often to get the most up to date data and information. Also, even though there are a series of regulations limiting play of some or all games online depending on the country, there is no precedent for a player being prosecuted under these laws. While we cannot definitively tell you that online gambling is legal from a player perspective, it is safe to say that these governments have no current plan to curb the industry by going after every individual who bets online.

From an operator perspective, there are a few European jurisdictions where an online gambling site can get a license which will allow them to “legally” operate their companies. Of course, this license still has to mix with the individual European country laws, so this licensing actually exists as a way to protect players from shady operators stealing their money.

The four jurisdictions in Europe were an online gambling site can apply for a license are Alderney, Isle Of Man, Malta, and Gibraltar. A site does not need to acquire more than one license (although some have) and each location has its own individual benefits.

Fortunately for European players, the amount of regulation they find in the region opens the doors for all sorts of payment processing options. What this means for players is a choice to use debit and credit cards, third-party payments companies, and even Paypal to make their deposits and withdrawals.

What does this look like? Here is a partial list of third-party e-cash payments providers for the European market:

Some of these may not be available in your country, but there is no doubt that you will have heard of many of these and may even already have accounts with them, which will make your online gambling experience even easier!

Finally, when you are researching what online gambling site to play at, you should look to see if they offer games in your local currency. Most sites will offer games in Pounds or Euros, which covers a significant amount of people, however, if you are in a country with its own currency, we don’t want you to find yourself paying adverse exchange rates just to get the currency into your account. Our reviews of European-facing gambling sites outlines all the currencies that a site accepts.

Mobile Gambling in Europe

As we discussed, the European online gaming market is more mature than their North American counterparts.This is best seen in the way that Europeans gamble on their sports, especially soccer.

Allowing players to gamble from their mobile devices means that the tens of thousands of possible bettors sitting in any soccer stadium have the opportunity to place wagers on what they are watching in real time.

Online operators quickly built mobile-friendly platforms to accommodate this type of betting, and that quickly spread to all forms of sports betting. These days, European players can play all their favorite online games directly from their phones or tablets, including most casino games and poker. Each individual European country has their own laws in place, but many countries also allow for native apps to be downloaded to devices to enhance the quality of the player experience further.

Finding the Best Promotions From European Gambling Sites

When you are looking for a European online gambling site, it’s important to take into consideration what types of promotions a site offers and to make sure that their offers fit your needs. If you are a sports bettor and most of a site’s promotions are free-spin-based, for example, then we wouldn’t recommend you make a deposit. The bonuses you receive at a site are part of the value proposition that will assist in making you a profitable player over the long run.

With so many different games being offered by the biggest online gambling sites, marketing departments for these companies are working overtime to make sure all their promotional offers are attractive to any player who comes along. On top of the free chip and free bet promotions designed to reward players for creating accounts without depositing, you should be looking for the best return on your initial deposits and any loyalty programs the site offers to extend your play.

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Finally, with so many countries in play, many online gambling sites tailor some promotions to be localized for specific countries. For example, you may find a poker promotion that rewards players from France only to qualify for a local live tournament or sporting event; those types of promotions offer great value as the player pool is likely much smaller than for the site’s global promotions.

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What About Customer Service for All These Customers?

Customer Service can be a minefield for many online gamblers. Getting through to a live person to speak with at the time you need them can be a frustrating process, which becomes even worse when you realize that the person with whom you are speaking does not speak your language. No amount of Google translate can help in these situations; it usually makes the process slow and painful.

Most of the large online gambling sites that offer games to Europeans also provide customer service in several languages. This is usually determined by the number of players from a given country that is in the site’s database. Sometimes this specialized customer service is only available during peak hours, but in a worst case scenario you will always be able to email the site with your issue, and you will most likely receive a response back in your language.

North American online gamblers have a significant amount of envy when they see all the options Europeans have for regulated, legal online gambling.

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Add in some killer promotions, and it’s entirely clear that any European that has the ability to gamble online should be able to find exactly what they are looking for to suit their needs.