When you play at a casino, you can win a few dollars here and there and walk away with more dollars than you brought with you. It can be as little as $20 or as much as $1,000. When cashing out, he was never presented with a form to report his earnings to the IRS. If you think you’re home free, think again. As a US citizen, you owe Uncle Sam a share of the stock, regardless of the amount. Many players think that just because they were not given a tax form, they are free at home. not so
So what is reported to the IRS? Larger amounts are won at gaming establishments such as casinos, lottery shops, racetracks, and backcountry betting parlors. They will issue a W-2G form, one copy for you and one for the IRS. Here are some details:
$1,200 or more won on slots, video poker, video keno, video blackjack, etc. This only applies to a single jackpot payout amount. Accumulated credits are credit counter earnings and do not count.
$1,200 or more won in a live bingo game will also trigger a W-2G, and $1,500 or more in a live keno game (less your bet amounts).
The casino will not withhold any gaming tax on prizes in the range of $1,200 to $1,500 as long as you present valid photo identification and a social security number. If you do not provide this information, 28% will be withheld.
live table games
Winnings from live table games are not reported on a W-2G form, except if a very large prize amount is offered for a small bet, such as a dollar bet for a shot at a progressive table jackpot, where the odds of winning are more than 300. /1 and the win is more than $600. For example, Caribbean Stud offers a huge progressive jackpot for betting just $1, if you are lucky enough to win a royal flush.
If you win $600 or more on any other gambling game, such as horse racing, dog racing or sports betting, and the amount is at least 300 times your stake minus your stake amount, the establishment will give you a W-2G. If your winnings exceed $5,000 and the amount is more than 300 times your stake, 25% will be withheld. The same retention percentage also applies to any cash prize of $5,000 or more in poker or other card tournaments less the buy-in amount.
Winnings in state lottery games such as lotto, numbers, scratch-offs, etc. can be picked up at your local dealer up to $600. A little longer and you’ll have to visit the main lottery office in your community, where a W-2G form is also waiting for you. This information is from the New York lottery. Other states may have different rules.
Winnings in Daily Fantasy Sports (DFS) contests at this time are considered 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 of any class II â€‹Video Lottery Terminal game will also invite W-2G. This includes any winnings on machines in jurisdictions operated by a state lottery. For example, the state of New York has nine race tracks with VLTs that are pseudo slots and video poker.
The good news in all of this is that gambling losses are tax deductible, but only up to the amount of your winnings, and only if you itemize the deductions on your tax return.
The IRS wants to make sure that you actually lost what you claim to have lost, so a record of all your losses is required. Profit and loss statements are available at most major casinos at the end of the year, provided you have used your player’s club card when playing the machines. Save those who lose Scratch-Off tickets, Lotto, Powerball and Mega-Millions tickets, daily numbers, Quick Draw, OTB, etc.
For losses in Daily Fantasy Sports contests, the IRS’s position at this time is unclear. Due to the ability factor, your earnings are in the Hobby category. Therefore, the losses would not be deductible, although this situation could change at any time.
You do not need to record the tickets on your tax return, but they may be required if you are audited. All the IRS wants to know is the type of bet, 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.