When you play in a casino, you can win a few dollars here and there and walk away with more money than what you brought with you. This can cost as little as $ 20 or up to $ 1,000. When cashing out, you were never presented with a form to report your earnings to the IRS. If you think you are free at home, think again. As an American citizen, you owe Uncle Sam a piece of the action, regardless of the amount. Many players believe that, simply because they have not received a tax form, they are free. But no.
So, what is reported to the IRS? Larger amounts that are won in gaming establishments such as casinos, lottery retailers, horse racing tracks and off-track betting houses. 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 a slot machine, video poker, video keno, video blackjack, etc. This only applies to a single jackpot payout amount. Accumulated credits are credit meter gains and do not count.
$ 1,200 or more won in a live bingo match will also trigger a W-2G, and $ 1,500 or more in a live keno match (minus your stake amounts).
The casino will not withhold any gaming tax on rewards of $ 1,200 to $ 1,500 provided you present a valid photo ID and social security number. If you do not provide this information, 28% will be retained.
Live Table Games
Winnings from live table games are not reportable on a W-2G, unless there is a very large amount offered for a small bet, such as a dollar bet for a shot on a progressive table jackpot , where the winning odds are greater than 300/1 and the payout is greater than $ 600. For example, Caribbean Stud offers a huge progressive jackpot to bet only $ 1 if you are lucky enough to win a Royal Flush.
If you win $ 600 or more in any other betting game, such as horse racing, dog racing or sports betting, and the amount is at least 300 times your stake minus the amount of your stake, 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 retained. The same withholding percentage also applies to any cash prize of $ 5,000 or more in poker or other card tournaments minus the buy-in amount.
Winnings on state lottery games such as lotto, numbers, scratching, etc. can be collected from your local retailer up to $ 600. More and you will have to visit the main lottery office in your community, where a W-2G is also waiting for you. This information comes from the New York lottery. Other states may have different rules.
Winnings from the Daily Fantasy Sports (DFS) contests at this time are considered to be skill games. 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 class II winnings • Video lottery terminal the game will also invite a W-2G. This includes all winnings on machines in jurisdictions that are operated by a state lottery. For example, New York State has nine race tracks with VLTs which are slot machines and video poker machines.
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 specify the deductions on your tax return.
The IRS wants to make sure that you have lost what you claim to have lost, so a record of all your losses is required. Win 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 machines. Register those who lose their scratch tickets, their lottery, Powerball and Mega-Million tickets, their daily numbers, Quick Draw, OTB, etc.
For losses in the Daily Fantasy Sports contests, the position of the IRS at this time is unclear. Because of skill factor, your earnings are in the leisure Category. Therefore, no loss would be deductible, although this situation may change at any time.
You do not need 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 bet, the amount of the bet and the date of the transaction.
Always play with caution and check with your tax preparer for your personal needs.