July 6, 2021

Taxes on your Gambling Earnings — Your debt Uncle sam an item No matter How much You Won

When you’re playing at a casino, you may win a few bucks occasionally and leave with an increase of dollars than you brought with you. It may be as little as $20, or as dewa poker much as $1, 000. When cashing out you’re never presented you with a form to declare your earnings to the IRS. If you think you’re home free, reconsider that thought. As a You. S. person, your debt Uncle sam a piece of the action regardless of the amount. Many players think that simply because these were not given a tax form there’re home free. Not so.

So, what does get reported to the IRS? Larger amounts that are won at playing establishments such as casinos, lottery retailers, horse race tracks and off-track bets parlors. They will issue a questionnaire W-2G, one copy to you and one to the IRS. Here are some details:

Machine Games

$1, 200 or more won at a slot machine game, video poker, video keno, video blackjack, etc. This only applies to a single jackpot payout amount. Accumulated credits are credit meter wins , nor count.

$1, 200 or more won at a live bingo game will also trigger a W-2G, and $1, 500 or more at a live keno game (minus your guess amounts).

The casino will not reduce to give any playing taxes from awards in the $1, 200 to $1, 500 range provided you present a valid photo ID and social security number. If you do not provide this information, 28% will be withheld.

Live Table Games

Earnings from live table games are not reportable on a W-2G, except if there is a very large prize amount offered for a small guess, such as a dollar bet for a shot at a progressive table jackpot, where the winning chances are over 300/1 and the win is more than $600. For example, Caribbean Stud offers a huge progressive jackpot for wagering only $1, if you’re lucky hitting a Regal Flush.

If you win $600 or more in a other wagering game, such as horse, dog racing or sports bets, and the amount are at least 300 times your bet subtract your guess amount, the establishment will gift you with a W-2G. If your earnings exceed $5, 000 and the amount is more than 300 times your bet, 25% will be withheld. The same withholding percentage also applies to any cash prize of $5, 000 or more in poker or other card tourneys minus the buy-in amount.

Earnings on state lottery games such as lotto, numbers, scratch-offs, etc. can be collected at your local retailer up to $600. Any more and you’ll have to go to the main lottery office in your community, where a W-2G also awaits you. This information is from the New york lottery. Other states may have different rules.

Earnings on Daily Fantasy Sports (DFS) competitions at this time are viewed games of skill. DFS sites will issue a 1099-MISC, not a W-2G for earnings of $600 or more.

Video Lottery Terminals (VLT)

$600 or more in earnings from any class II ​Video Lottery Critical game will also invite a W-2G. This includes any earnings on machines at jurisdictions that are managed by a state lottery. For example, New york State has nine race tracks with VLT’s that are pseudo position and video poker machines.

Reductions

The good news in all of this is that playing losses are tax deductible but only up to the amount of your earnings, and only if you itemize reductions on your tax return.

The IRS wants to make sure that you indeed lost what you claim you lost, so a record of all your losses is required. Win- loss statements are available from most major casinos at the end of the year, provided you used your player’s club card when playing machines. Save those losing scratch-off tickets, Lotto, Powerball, and Mega-Millions tickets, daily numbers, Quick Draw, OTB, etc.

For losses on Daily Fantasy Sports competitions, the IRS position at this time is unclear. Because of the skill factor, your earnings are in the hobby category. Therefore, any losses would not be deductible, although this case could change at any time.

You don’t have to record the tickets on your tax statement, but they may be necessary if you are audited. All the IRS wants to know is the type of guess, the amount of the bet and the date of the transaction.

Always play it safe and check with your tax preparer for your personal needs.

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