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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 493
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Please let me know if as a mexican citizen I can get back

Customer Question

please let me know if as a mexican citizen I can get back the taxes amount hold by the Casino in Vegas?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: Gambilng in Vegas I won $1300.00. The Casino hold 30% as tax and paid me the diference.
JA: Is there anything else the Accountant should be aware of?
Customer: I pay taxes in Mexico
Submitted: 1 month ago.
Category: Tax
Expert:  taxmanrog replied 1 month ago.

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Expert:  taxmanrog replied 1 month ago.

Nonresident aliens pay U.S. tax on their “fixed or determinable annual or periodical gains, profits, and income” from U.S. sources. That phrase is hard to decipher, but it includes gambling winnings. Normally, US citizens or resident aliens can deduct gambling losses up to the extent of gambling winnings to reduce the amount that we pay tax on, because we all know that the casinos win most of the time. However, nonresident aliens can only deduct items effectively connected with the conduct of a trade or business within the U.S. As a result, gambling losses are not deductible by a nonresident alien. Taxing winnings but not allowing related losses doesn’t seem very fair, but there is a lot in the US tax code that is not fair.

You may be able to get some of the withholding back by filing a Form 1040NR, but this would only be because as a citizen or national of Mexico you are allowed personal exemptions for yourself and your wife, so you won't be taxed on all of the income.

The bright side is that under the US-Mexico income tax treaty, Mexico should give you a tax credit for a portion of the tax that you pay to the US.

I hope this answers your questions! If you have any more, please let me know.

Have a great week!

Roger

Expert:  taxmanrog replied 1 month ago.

I should tell you that if you wanted to be aggressive, you could try to deduct your gambling losses. There are several cases that say you cannot, but there is one, Park v Commissioner, 12-1058 US Court of Appeals - DC Circuit, that found a nonresident gambler could deduct gambling losses. But for now, this is law only in the Washington, DC Circuit Courts. All others still follow the old law, as it was determined by the US Tax Court, which is nation wide.

So if you feel lucky and want to gamble on the outcome, you can try to deduct your losses, but I don't guarantee that you will win. Your odds in Vegas might be better!

Roger