The feeling of winning big at the casino is one that cannot be tarnished by anything, except for taxes. That’s right, your winnings are subject to taxes just like any other source of income you may have for the year. If you think you can get away with not paying taxes on it, you are mistaken. Federal and state governments slap their own unique taxes on winnings, therefore, they keep a close eye on this industry and not paying can lead to some very hefty fines. Let’s take a closer look.
How Much To Pay
The good news is that unlike income taxes, which are progressive, taxes on winnings at the casino are not. If you win $1,000 or $1,000,000, you are still going to pay the same taxes. What you need to pay attention to is the reporting procedures. Here is what you have to report:
- Poker tournament winnings that total $5,000 or more.
- Slot machine or bingo winnings of $1,200 or more.
- Keno winnings of $1,500 or more.
- Winnings at a horse race that total $600 or more, so long as it is at least 300 times your bet amount.
The winning mentioned above require that you fill out Form W2-G with that amount won. Typically, the casino will take 25% from what you won on behalf of the IRS before they even give you the money. Keep in mind that winnings from table games, such craps and blackjack, do not require that you fill out Form W2-G. You will still have to pay taxes on your winnings, just don’t have to fill out the form.
Even if you win smaller amounts than what we have listed above, you are still required to report your winnings to Uncle Sam. That means if you only win $5, you still have to report it as it will count towards your total income for the year.
While Uncle Sam is getting his share, your state might fill left out and want a slice from your winnings as well. Each state has their one specific laws and regulations covering gambling winnings so your best bet is to contact your state’s taxation department and find out exactly what you will have to do.
Finally, if you find that you have lost a great deal of money, got behind on your debts, or simply feel that you may have a problem with gambling, please seek help. There is help readily available for you.