Ask the Slot Expert: Can I have taxes withheld from my slot jackpot?

Hi John,

I am traveling to Vegas again soon and have a question regarding hitting a jackpot of over $1,200. I would like to know when I won $1,250 last year if I could have had my taxes taken out right then instead of later when I file? Is there a certain limit that they will only do that with? Heading to Vegas in February and plan to hit the big one!

Thanks,
Colleen

Dear Colleen,

I suppose you could ask the casino to withhold the 28 percent backup withholding even though it is not required in your case. I've never done it and I don't know anyone who has.

I recommend against it, though. I would rather take the entire amount of my winnings and then make estimated tax payments each quarter to ensure I sent enough tax money to the IRS to avoid a penalty. (Actually, when I've fallen into this situation in the past, I didn't pay the estimated payments and just paid the penalty. The penalty was small because the income is spread equally over four quarters and the amount of taxes I owed was small.) Another option you have for paying the extra taxes if you have wages is to increase your withholding from your wages. The bottom line is that you can pay the tax you owe on your big jackpot over time and therefore have use of the money, rather than paying it all up front and letting the government have use of the money instead. It won't send you a thank-you note.

I would recommend having the taxes taken out up front only if you are a poor money manager and can't follow any of my other suggestions.

Best wishes for hitting your jackpot,
John

Friends of ours have gotten into slot playing at an excessive clip in the last few years. They have it in their minds that if you stop the spin you have a better chance of winning, which in my mind is meaningless. More than likely it's because they hit a few times while doing so. Could you please reply to this childish way of playing slots?

John

Dear John,

I wouldn't go so far as to call stopping the spin a childish way to play. Impatient, maybe. But I may be biased. I have to admit that I sometimes stop the spin, but doing so is far more the exception than the rule.

Stopping the spin will not affect the outcome of the spin. It just cuts out the "show" -- that is, the spinning of the reels. You'll get the same results regardless of whether you stop the spin or let it play out.

Here's an experiment your friends can try. Play 100 spins stopping each spin and 100 spins letting each play out. Keep track of the number of winning spins using each method. The number of winning spins should be about the same with each method. That should convince your friends that stopping the spin does not improve their results.

There is just one thing that stopping the spin does. It increases the number of spins you can play per hour because spins take less time. More spins usually result in greater losses. You can stretch your bankroll by sitting back and enjoying the show.

Jackpots for all,
John

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