Most people don’t think about taxes on their way to a racetrack or casino, but what might seem like nothing more than the chance to win some extra money actually has some tax implications. As is often the case, federal and state governments single out casino winnings for unique taxes of their own.
Here is what you need to know about how gambling affects your taxes:
How Much You Win Matters
It’s important for you to know the thresholds that require income reporting by the payer. Winnings in the following amounts must be reported to the IRS by the payer:
- $600 or more at a horse track (if that is 300 times your bet)
- $1,200 or more at a slot machine or bingo game
- $1,500 or more in keno winnings (minus the amount you bet)
- $5,000 or more in poker tournament winnings (minus the amount you bet or buy-in price)
All of these require giving the payer your Social Security number, as well as filling out IRS Form W2-G to report the full amount won. In most cases, the casino will take 24 percent off your winnings for IRS gambling taxes before paying you.
Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-G forms are not required for winnings from table games such as blackjack, craps, baccarat, and roulette, regardless of the amount.
Note that this does not mean you are exempt from paying taxes or reporting the winnings on your taxes. Any and all gambling winnings must be reported to the IRS. It only means that you do not have to fill out Form W2-G for these particular table-based games.
Reporting Smaller Winnings
Even if you do not win as much as the amounts above, you are still legally obligated to claim your winnings at tax-time. You also need to report any awards or prize money you won during the year. Yes, even if you only win $10 sports gambling, you still technically have to report it (even if the casino didn’t). Your gambling income also includes the fair market value of prizes such as cars or trips.
Gambling income plus your job income (and any other income) equals your total income. Fortunately, you do not necessarily have to pay taxes on all your winnings. Instead, if you itemize your deductions, you can claim your losses up to the amount of your winnings. But the amount of losses you deduct can’t be more than the amount of gambling income you reported on your tax return.
*Note, under the tax reform law, the gambling loss limitation was modified. Prior to the tax reform law, taxpayers’ costs (like transportation and admission fees) could be claimed regardless of winnings. But beginning with the tax year 2018 (the taxes filed in 2019), all expenses in connection with gambling, not just gambling losses, are limited to gambling winnings.
What About State Taxes?
In addition to federal taxes payable to the IRS, many state governments tax gambling income as well. Each state has its own unique formulas and rules for gambling income, and some levy no gambling taxes at all. Some states charge a flat percentage, while others base the state tax on how much you won.
TurboTax Has You Covered
Don’t worry about knowing these tax rules. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind.
Written by Ginita Wall
489 responses to “Gambling Winnings Tax (How Much You Will Pay For Winning?)”
Great post I was wondering to find blog…
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I love how you broke down [complex topic] into easy-to-understand steps. Your explanations are concise yet comprehensive. It’s evident that you have a deep
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very nice.
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This is a comment and not a question. Many senior citizens like to go to casinos and participate in other types of gambling. It is one of the few fun things they can do. Senior citizens (on social security and high medical costs) are penalized by the IRS when they win a jackpot or other large amount over the taxable threshold. When filing the 1040 tax return, the winnings are added to their income (such as that from an IRA) and the amount is reported on the 1040 form and used for determining the amount of their social security that is taxed. Also, this taxable income amount increases the threshold for allowable medical deductions (multiplied by 7.5%, 2018 taxes or 10%, 2019 taxes). If the senior tax payer can itemize, the gambling losses up to the amount of his/her winnings is listed on schedule A and used as a deduction but this is after the amount of taxable social security is determined and after the amount of medical deductions allowed is determined. Therefore, a senior citizen taxes paid are inflated by this tax determination method used by the IRS. The correct way to declare gambling winnings would be to use the method that is used for indicating the income from an IRA. The IRA has a line that lists the total amount of IRA income and a second line that indicates the taxable portion of the IRA. Thus gambling winnings should be considered in the same income section of the 1040 form and the losses up to the amount of the winnings would be indicated on the second line. The gambling winnings would then be determined by subtracting losses from winnings. Since this is done before the taxable social security and allowable medical determinations, the senior tax payer would not be unfairly taxed. The AARP organization is “suppose” to be looking out for senior citizens, so this should be an area that they should try to get corrected.
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Can you prepay the estimated taxes on gambling winnings under $5,000 where the casino did not deduct any tax by adding it to your quarterly tax payment on 2019 Form 1040-ES or should you wait to file your taxes for 2019 in January of 2020? Ex) If you won $3,000 on a slot machine, can you send the IRS $720 (24%) now?
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Hi,
Congratulations on your win. Yes, you may send an Estimated Tax payment now. Here are a couple of other reminders:
1. Document the amount & date paid so you can add to the tax return when you file next year.
2. If you are Itemizing your Tax deductions remember; you may deduct gambling losses up to the amount of the winnings claimed on your tax return.
3. Remember to keep proof of your losses. These items can be in the form of annual statements and non-winning tickets.
Thank you
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I recently won $2240.00 on a cruise. I was paid on the ship and given a W-2G form before I left the ship. I do not file deductions just the simple 1040EZ. How much income tax should I expect to pay on this? Wonder if I can pay that in now and avoid it the first of the year?
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Hi Emily,
The amount of taxes due will depend on how much you have paid in taxes already and other deductions and credits you’re eligible for. You have to report your winnings and file a tax return for the year funds were received. Meaning, if you won in 2019 then you need to file a 2019 tax return.
Also, you can only claim your gambling losses if you are able to itemize your tax deductions. Itemized deductions have to be more than the standard deduction which was raised to: $12,000 single, $24,000 married filing jointly.
Thank you.
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In 2018, won $5232 in high hand promotion payouts in casino poker room. Was sent a 1099-Misc. Lost more than that on slots for same time frame. Can these two net to zero? Hand hand promotions appears to be treated as “prizes”.
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Thought I was done with taxes and was going to owe 1540…..when I remembered I won a jackpot worth $1767. My total due escalated to $7,600. What gives? PS I’m retired and don’t make over $60000
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That sounds like a mathematical error to me. No way the tax exceeds the additional income, unless it bumps you out of a credit or something similar. Even then, your difference is excessive.
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its possible that the additional income also triggered a larger part of social security to be taxable. Even though you under-reported the $1,767, that additional income may have led to more of your social security to be taxable thereby increasing the amount you owe
I don’t file a 1040 cause I don’ Have enough income. I did win $2,000 on a casino slot machine but only got $1400 because they took out zillion the taxes at the time they paid. Do I have to fill out and send in any form.
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Do I need to report winnings from fantasy sports, if my total winnings are under $600?
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My husband won at a casino. Can we include my losses to off set his winnings?
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Hello Rosemary,
If you are filing a Married Filing Joint (MFJ) tax return then your losses might be deductible. Winnings from gambling can be taxable and should be reported on your tax return. Winnings may be reported on a W2-G.
However, if you itemize deductions on the schedule A, then you may deduct gambling losses only up to the amount of the winnings claimed on your tax return. Remember to keep proof of your losses. These items can be in the form of annual statements and non-winning tickets.
ThanksReply
I purchase scratch off tickets and enter the numbers for lucke-rewards games and second chance games in NC. I have not been saving these tickets after I enter them. Being that I logged them into the NC Lottery site do I still need to keep the actual tickets?
Hello Donna,
No, the actual tickets are not necessary. But, you must have some type of log, ledger, annual statement, or other type of of system that tracks your proof of losses.
Thank you
last year, I won $5000 with a scratch off. I’m receiving Medicaid and food stamps. As a result, they took half of the money, and I received the rest. How do I declare this on my taxes, as I did work 6 months out of the year, last year. In other words, do I declare the whole amount, or do I just declare the amount I received.
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Hello Cheryl,
Winnings from gambling can be taxable and should be reported on your tax return. You should have received a W2-G showing the full winning amount and the amount of taxes withheld. Turbo Tax asks simple income questions to make sure the correct amounts are reported.
Hope this helps. Thank you.Reply
I won $4148 in 2018 but lost 20,000.00 at a casino. My tax man added what I won to my tax form..Is there a line to show your loses. I was going to get back $400.00 but when he added the winnings I had to pay$546.00. I thought if you lose more than you win it would be a wash. Can you explain.?
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I WON 44,000 AT CASINO , I LIVE IN MASS. , ALSO I HAVE 10,000 IN WRITTEN WIN LOSS STATEMENT, AND ALSO HAVE COLLECTED 12,500 FOR SSDI , HOW MUCH WILL I OWE IN FED., AND STATE TAXES. ARNOLD
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I WON 44,000 AT CASINO ON SLOTS , AND I GOT 12500 FOR DISABILITY , ALSO HAVE 10,000 ON PAPER FROM CASINO LOSSES WHAT WILL I OWE IN FEDERAL AND STATE TAXES. ARNOLD
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Hi Kenneth,
It will depend on how much you have paid in taxes already and other deductions and credits you’re eligible for. When you won money at the casino they may have already taken taxes out up front. Also, you can only claim your loss if you are able to itemize your tax deductions so your itemized deductions have to be more than the standard deduction($12,000 single, $24,000 married filing jointly) otherwise you would just take the standard deduction. You can start TurboTax and if you have questions along the way you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent to get your questions answered.
Best,
Lisa Greene-LewisReply
I won 100,000 on a scratch ticket in massachusetts and was taxed over 30,000 . can i claim those taxes back
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Hi Shane,
Yes, you should have received a Form W-2G that reports your winnings along with the taxes taken out. When you use TurboTax you will be asked the amounts withheld and the correct amount of your taxes will be calculated.
Best,
Lisa Greene-LewisReply
If I won a bet in 2018 but have not cashed the ticket until 2019, which year will I have to report the winnings?
So I won $2K on a pull of a slot in Vegas and received a W-G2. Over the trip I probably lost about $1.5K back, so a net gain of about $500. Now with new tax laws i am falling under standard deduction and not intemizing. So I have to pay tax on the $2,100 and don’t get credit for any of the losses?
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I won $2000 on a scratch off ticket and the nys lottery told me that because it wasn’t 200 times winning from the price of the ticket that a w2g would not be created. How do I have a physical document to show the IRS?
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Hi i won 8 thousand on a slot machine last yeat but I really dont make a lot of money roughley how much will I have to pay and will i even get anything back
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Can the taxes off a jackpot be taken out of my returns?
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i won 5000 at the casino can I use losing lottery tickets for my taxes and which tickets can I use and how many would I need
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Is there an error in TurboTax? I am entering $167k in gambling winning by painstakingly entering each W-2G, which I have very many of. When I enter the same in losses, I am still showing that I owe over 10k in taxes. Before entering gambling income and losses, I was showing a $2,500 refund. Very confused!
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In Ohio won $5500 on Keno but owe back federal taxes will they take my winnings?
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How much would I have to pay back in taxes on a 40,000.00 win
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I have about 150 W2-G forms to enter for 2018. I am about halfway through these (75k in wins). When I enter the same in losses, it still has me owing 10k in taxes? Why is it not a wash? At this rate, I’ll be owing the IRS 20k in taxes even though I lost more than I won for the year? Casino statement says me net is -90k. Should I claim as a professional gambler? I’m very confused as to why it’s still taxing me rather than being a wash. All other aspects of my return are completed, and I was sitting at a $2600 refund before starting to enter my W2-G forms. Help!
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My message will not be very useful, I just wanted to thank you for this information
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I won 45000 on the casino and gave it to my sick sister as a gift.. how do i put this on my taxes
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You’ll owe income taxes on the winnings, plus you’ll owe gift tax on the amount of the gift in excess of the exemption.
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I won 300,000 in Illinois lottery and when I went to pick up my check it came to 206,000. The IRS sent me a W-2G form. Why do I have to file this again , if it was already deducted at the lottery office ?
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You have to add it to the rest of your income, and pay the appropriate taxes based on the tax rate for your total taxable income. You could owe more tax, or you may get a refund.
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My son is a college student and 19. He went with some friends to an Indian Casino. He did not plan on gambling. He registered for the casino card that you swipe for points, etc. They had a promotional giveaway setup where you swiped that card to see if you were a “promotional giveaway” winner. He swiped it and won $10,000. Does he owe taxes? They gave him a check for the full amount.
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I won $17000 from the take5 and they took $5000 in taxes can i file that and receive money back in my income tax for the $5000 they took
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Can you provide any information on how Canadian residents are taxed on Casino or gambling winnings when preparing tax returns for Canada Revenue Agency?
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go to irs.gov and search for a 1040s form. then you just file it with your taxes
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if you are disabled do you have to pay taxes on casino winnings
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I can not believe you have to pay taxes on gambling winnings in the US , In the UK you pay zero taxes on gambling winnings .
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I won 10000 on a scratch ticket, the taxes taken out were 2400 federal and 500 state. Is there any way to get that money back, depending on your w2 and if you owe any taxes, which I don’t.
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Hi,
I won 100,000 so far this year and have lost $95,000. I understand how the Irs taxes this but cannot find out anywhere how New York State taxes this.
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I won $11960 total in handpays at the casino this year and paid federal taxes on most of them (except one 2000 dollar win). I happened to lose more than 12k as most gamblers do. I won $92600 total but lost $95399.01 on the statement for a net loss of about $2800. I played like crazy for the first 7 months of this year and then haven’t gambled since. I paid about 2400$ in federal income taxes on that $11,960. I also have about $5000 in other deductions including mortgage interest and taxes. I have receipts, credit card statements and bank records to prove most of the losses but not an exact diary although I could put one together with my documentation and casino win/loss statement.
So in short I paid federal taxes on close to 10k in winnings that I LOST BACK AND THEN SOME.
Have about 5k worth of regular deductions like taxes and insurance,
and my job income tax is about on point with what I would owe so that’s not a factor.My question is.. is it worth it to itemize based on the info above or should I take the standard deduction of 12k? I used to go to the casino twice a week and was wondering also if the casino players’ card tax statement was sufficient for the IRS? I am working on putting a diary together just in case it is not.
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The standard deduction is now $24,000.
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I am a frequent casino goer. I have a lady friend that likes to go to the casinos as well. My friend lost 40k more in 2017 than she won (as reported on her casino players cards as a net loss). The problem is that she also won a new Mercedes in 2017 at one of her casinos that was valued at 35k. She was told by her tax person that she couldn’t offset her gambling loss of 40k against her raffle win of 35k due to IRS’s categorizing them separately (one as a raffle win and one as a net gambling loss). Is that correct?
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I am in ss and don’t file tax returns. I won $1700 this year at a casino, ahold I file a return this year?
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Does an 80 year old have to pay taxes on winnings at a casino? If so, what percentage?
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;I am over 80yrs old see that most all of thee comments are about filing winnings, but what about loses? Isn’t there some way to deduct them?
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I won $5000 last year in win 4 lotto. When I went to cash ticket ny dept of finance took the whole amount. Do I have to file this on my tax return?
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Hi Diane Percio Orbanic,
There are many different reasons why the NY Dept of Finance seized your winnings. I would suggest contacting them to get the specifics. Unfortunately you will still need to report the income on your tax return. You will receive a form W-2G and can enter the information into the program.
Here is some more information around gambling winnings: https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/comment-page-3/#comments
Thanks,
Gin Goodman
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You apparently owed back taxes or other debts to the state, which they used your winnings to offset.
Since your debt was reduced by the winnings, you must report it as income and pay your taxes on it.Reply
I am exempt from maying taxes this year because I am a single, stay at home mom with no taxable income t report. I did win $5000.00 on a Fantasy sport site. Do I need to report this? if so what form do I need?
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Hi Heather,
The IRS has income filing requirements. If you’re single the income threshold is $10,400 ($20,800 married filing jointly) since you are under that amount and didn’t have taxes withheld you don’t need to file. If you would have had earned income and taxes were taken out it would have been worth filing to get your withholding back and you may have been eligible for the Earned Income Tax Credit.
Thank you,
Lisa Greene-LewisReply
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I'm an enthusiast with a deep understanding of tax implications related to gambling winnings. Having thoroughly researched and navigated through the complex web of tax regulations, I can provide valuable insights into how gambling can affect one's taxes.
In the article you shared, the following key concepts are discussed:
-
Thresholds for Reporting Winnings:
- $600 or more at a horse track (if that is 300 times your bet)
- $1,200 or more at a slot machine or bingo game
- $1,500 or more in keno winnings (minus the amount you bet)
- $5,000 or more in poker tournament winnings (minus the amount you bet or buy-in price)
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Reporting Requirements:
- Individuals must provide their Social Security number to the payer.
- IRS Form W2-G needs to be filled out to report the full amount won.
- Casinos often withhold 24 percent for IRS gambling taxes before paying the winner.
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Table Games and IRS Reporting:
- W2-G forms are not required for winnings from table games like blackjack, craps, baccarat, and roulette.
- However, all gambling winnings, regardless of the game, must be reported to the IRS.
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Smaller Winnings Reporting:
- Even if winnings are below the reporting thresholds, individuals are still obligated to claim them at tax-time.
- Awards or prize money, including the fair market value of non-cash prizes, must be reported.
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Offsetting Losses:
- Gambling income, when combined with job income and other earnings, contributes to the total income.
- Losses can be claimed up to the amount of winnings if itemizing deductions, but the losses deducted cannot exceed the reported gambling income.
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Changes in Tax Law:
- The article mentions modifications to the gambling loss limitation under the tax reform law, restricting expenses in connection with gambling to the amount of winnings.
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State Taxes:
- In addition to federal taxes, many state governments may also impose taxes on gambling income, with varying rules and formulas.
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TurboTax Service:
- The article suggests using TurboTax to simplify the tax-filing process, emphasizing the importance of understanding these tax rules.
The comments section further delves into specific scenarios, such as the tax implications of winning a car, concerns about senior citizens' taxation, and questions about estimating and prepaying taxes on gambling winnings.
Feel free to ask if you have any specific questions or if you'd like more detailed information on any of the mentioned concepts!
