This is why I don't gamble..
April 22, 2010 9:50 AM   Subscribe

My family member went to Potawatomi Bingo Casino in 2006 and won a small sum of money. Fast forward to March 2010, she gets a bill from Wisconsin asking her to pay taxes, interest, and fees on the money she won. She calls and inquires about this, and is told she has to file a state tax return for Wisconsin. She wants me to do it on the computer, but I don't know what I'm doing. Help!

Complications: My family member lives in Michigan and she's on SSI.

I don't feel comfortable filling out her taxes like this. I quickly filled out info on, but it ended up saying she didn't owe anything. The state of Wisconsin thinks she does. I'm very confused. Not to mention that priortax wants $35 and turbotax wants $45 (per state and I'm not even sure which state she needs to buy.. the one she lives in or the one she owes money to?) to file.

It was a bill that Wisconsin sent, asking her to pay a specific amount. Can filing her taxes change this? Could she possibly not owe anything because of low income? Or should she just pay the bill? Will that resolve the issue or will she still have to file a tax return no matter what?

Can an IRS office help us with this? Is there some kind of tax-help organization for disabled or low-income people in Michigan she can go to? Every year the city she lives in offers tax help for seniors, but it's only available until the April 15th.

What are her options? She can't afford $45 to find out it's the wrong thing and has to spend more to fix it.
posted by anonymous to Work & Money (7 answers total)
Call them.
posted by caddis at 10:00 AM on April 22, 2010

You can download the correct year's non-resident tax return (1NPR) and instructions the Wisconsin Dept of Revenue website. It really shouldn't be too hard to fill out the paper form because she didn't any other Wisconsin income.

Did she get a 1099 from the casino? She'll need that information to complete the tax return.
posted by vespabelle at 10:18 AM on April 22, 2010

Info on taxation of gambling winnings. Looks like taxes come due if her winnings exceed $2,000.
posted by caddis at 10:49 AM on April 22, 2010

Don't take my word for it, but she might be able to deduct the amount of money she lost in Wisconsin casinos to win that amount.
posted by hotbutton at 10:56 AM on April 22, 2010

Wisconsin doesn't allow gambling loss deductions. Although that's something to keep in mind if the IRS comes a'calling.
posted by elsietheeel at 11:05 AM on April 22, 2010

Wisconsin has tax reciprocity with Michigan [pdf]. In theory this means that any taxes she paid on the winnings in Michigan (assuming she reported this as income) would be deductible from the Wisconsin NR return, or vice versa if she did not. Wisconsin will in due course report any filing to Michigan, so she'll have to amend any return already filed.

But in theory she only pays taxes on the winnings once. In practice might mean something different depending on lots of different factors.
posted by dhartung at 5:39 PM on April 22, 2010

Oh, the real kicker, unfortunately, is that this income could jeopardize some portion of the SSI.
posted by dhartung at 5:41 PM on April 22, 2010

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