So you won some money at gambling, and you want to know if you have to pay the Government, income taxes on your winnings. Well, the short answer to that is yes, but there are some exceptions to the rule.
If you had gambling winnings you’re required to report them as other income on IRS Form 1040. The tax rate for online, internet and sports gambling winnings is the same as your regular income.
If you had gambling losses you are allowed to deduct what you lost, up to the amount that you’ve won. You are not allowed to deduct gambling losses that exceed your winnings, and you are not allowed to carry-over your losses from one year to another.
A Form W-2G is used to report gambling winnings from, internet, online, casino, sports betting, horse racing, lotteries, bingo and other legal gambling activities.
You’ll receive a Form W-2G if:
Income taxes were withheld from your winnings
You won at least $600 or more and your winnings were at least 300 times the amount of your bet
Your winnings were from a slot machine or bingo in the amount of $1200 or more
Your winnings were from keno in the amount of $1500 or more.
How to deduct your losses from your winnings
In order to avoid paying gambling tax you’ll need to itemize your losses on Schedule A tax form (itemized deductions). As with most itemized deductions you are required to keep a record of gambling winnings and losses. You should keep the date, time, type, place, tickets, receipts and any other records you have as proof.
By keeping accurate records of your online, internet and casino gambling you can pay less tax when you win. When you pay less gambling tax, you win again!
