After celebrating your winnings at a slot machine, blackjack table or Mississippi Stud table game, the last thing on your mind likely will be paying taxes on them. Unfortunately, however, it’s a fact of life that all gambling winnings over $1, 200 must be reported and paid into the IRS on Form 1040 Tax Form; casinos and other payers must withhold federal income taxes at 25% on winnings above this amount, except those won from table games considered skill games by the IRS.
If you reside in the us and win a large enough jackpot to be taxed, your casino will issue you with a W-2G form that details how much was won along with any taxes withheld and withheld amounts; then file it along with your federal and state income tax returns. Any winnings from other jurisdictions (for instance if playing somewhere that imposes higher taxes than where you reside) should also be subject to tax at local rates.
Winnings from casino and other forms of gambling in the us are considered taxable, including jackpots totalling more than $1, 200 on slot machines, bingo or video poker; or $1500 from Keno; or $5, 000 or more won from games of skill such as blackjack or baccarat. Residents of Texas winning such prizes will be issued a W-2G form by their casino/payer and required to report them.
Gambling losses can help lower the total amount of taxes owed; however, be mindful that your deduction must exceed any winnings from gambling activities; be sure to carefully track them!
New york residents must report all gambling winnings, from slot machines and table games to the lottery, as taxable income in their state. Winnings could force you into different tax brackets than your regular marginal rate – potentially becoming problematic in states with higher taxes like New york.
The Internal revenue service has issued a proposed safe harbor that will enable taxpayers to calculate gambling gains and losses from electronically tracked slot machine play on an overall session basis, rather than bet-by-bet basis. This change in tax law is anticipated to help reduce gambling audits; it should also help streamline auditing procedures; however, please remember this proposal could still change at any time, so always consult a tax professional when filing your return.