How Are Gambling Winnings Taxed?

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This weekend is the Kentucky Derby, one of the most popular sports gambling events of the year. Most people don’t think about taxes on their way to the track or casino, but what might seem like nothing more than the chance to win some extra money actually carries significant tax implications. As is often the case, federal and state governments single out casino winnings for unique taxes of their own. Failure to properly report your haul may result in penalties and headaches, so be aware of these rules to stay on the safe side:

How Much You Win Matters

Gamblers are lucky in that casino taxes are not progressive like income taxes are. That is, you will owe the same percentage to the IRS on a $100,000 jackpot as a $10,000 one. Yet, it’s important to know the thresholds that require reporting. Winnings in the following amounts must be reported:

  • $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
  • $5,000 or more in poker tournament winnings
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 25 percent off your winnings for the IRS before even paying you.
Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-Gs 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. 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 report. You also need to report any awards or prize money you won during the year in question. Yes, even if you only win $10, you still technically have to report it (even if the casino didn’t). 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, you can offset taxes owed on your winnings by reporting any losses you incurred as well. You are allowed to claim as much as the total amount won that appears on Form 1040, which would eliminate your taxable gambling income. Just be sure any deductions taken this way (in combination with other itemized deductions) are higher than the standard amount. Otherwise it would make more sense not to itemize, even if it meant foregoing your gambling loss deductions.

What About State Taxes?

In addition to federal taxes payable to the IRS, many state governments tax gambling income as well. Each state has their own unique formulas and rules for gambling income. Some levy no gambling taxes at all. Others charge a flat percentage, while still others ramp up the percentage owed depending on how much you won. When in doubt, refer to your own state’s policies online before gambling.
Don’t worry about knowing these and other tax laws.  TurboTax will ask you simple questions and give you the tax credits and deductions you are eligible for.

Comments (414) Leave your comment

  1. I live in Pennsylvania and won $30,000 on a scratch off ticket. I received a check for $22,500. I have losing tickets totaling $38,000. I am married filing jointly with an AGI of roughly $120,000. Am I due a refund for the taxes paid on the winning ticket?

    1. Tom, based on the information you have given, you will receive a refund of the Federal income tax withheld for the scratch off win. We have to assume that you had the proper amount of income tax withheld from the $120,000 in AGI, and that total does not include the $30,000 win.

      Of the $38,000 losing ticket total, you will only be able to deduct $30,000.

      Just having the losing tickets may not be enough. You should have a gambling diary detailing the purchases of those tickets. A gambling diary should include the following, and you may be allowed to tailor entries to cover your ticket purchases:

      – Date and type of gambling activity or wager placed
      – Name and address of the establishment at which you were gambling
      – Names of any other persons who accompanied you while you were gambling
      – Amount you won or lost

      An example might be:

      Feb. 14, 2015:
      Purchased 20 “Super Slam” $1 scratch off lottery tickets at 9:00 PM.
      Circus Liquor Store, 5858 Sunset Blvd., Los Angeles CA 90028
      Jeff Stevens was with me.
      Total won $5. Total lost (20 tickets X $1) $20. (Net loss for session is $15.)

      Note that I do not know for a fact what the IRS considers a session of scratch off lottery play.

  2. I won $10,000 in July on the Kansas powerball. When I picked up my check it was for $7,000. They had taken out $2500.00 for federal and $500 for state. My question is how do I report this on my taxes? I never received a w-2g for the winnings. I’m just really confused on how to do this. Do I file it separate or with my w-2 from my work?

    1. The Powerball probably has a little more time to send you your W2-G for 2014. If you do not receive one by the end of February, then contact them, and ask for one. Otherwise, around April 1, you or your tax person can check your Wage and Income statement at the IRS website, and see if the W2-G has posted to it.

    2. Jenny, you are going to report the $10,000 on Line 21 of your Form 1040. That is where the W2-G amounts go.

      Your W2 from work should end up on Line 7.

      The Federal income tax withheld from your W2 at work, and from your W2-G (the $2500) will total together on Line 64 of Form 1040.

      If you correctly enter the data from the forms in TurboTax, then you should see the correct totals appear on those lines.

  3. Hi I won twice at the Indian casino. Total is $3900.00 and I just started working around August of 2014 and that year I only make $5400.00 Am I gonna owe any money when I file my tax this year?

    1. Rhey, based on the information given, you will owe no Federal income tax.

      Need more information to determine if you owe state income tax, especially what state you file in.

    2. Washington State does not have a state income tax. Also, according to their website, they do not have a separate tax on gambling winnings. Looks as if you will not have to worry about any state tax on the $3900.

    3. Rhey, one last thing. Be sure to determine whether or not you qualify for the Earned Income Credit. TurboTax should help you with this determination.

  4. Hi,
    I live in Canada and I got 3 jackpot in Las Vegas in 2014.
    5083+1272+7145..and they took 30% tax, of course..my 30% tax is 4054..
    I just printed tax information statement.. I won 7414.40 and I lost 3546.76, so.. total I won 3867.64..
    What I want to know is…can I get back whole 30% tax 4054 even though I won 3867.64???
    I lost in 2013, so I got whole 30%tax last year, but,,I just wonder I can get whole tax or not..

    Also I read some article that I can claim my flight,and accomodation fee..is this right??
    Please let me know:)
    Thanks

  5. I live in Texas and go to Winstar Casino (Oklahoma) quite a bit last year and I won only $4863.34 in total that I received W2G. Do I have to file 2 separate returns? One for my 1040ez & one for Form 945? Or can I combine them? And how much do I have to pay taxes on my winnings? I have only a couple of list of my losses/bank statement showing my withdrawals in the casino. Since I only started tracking my losses end of this year.

    1. Hi Dee,
      No you would not file two separate tax returns. Form 945 is used for payors. Your losses cannot be more than your winnings and you have to itemize in order to take them. Not sure if you have enough deductions to itemize(Must be more than $6,200 standard deduction if single, $12,400 if married filing jointly). Also, if you itemize you can’t file 1040EZ.
      Thank you,
      Lisa Greene-Lewis

      1. Lisa,

        Thanks for clarifying. What form do I need to use in order to itemize the deductions?

        I’m using turbo tax website and I’m completely confused since this is my first time to include gambling wins.

        glad to know I don’t have to file 2 separate returns.

    2. Dee, in addition to your Federal tax return, you are also required to file an Oklahoma state nonresident tax return – Form 511NR.

      From the Oklahoma Tax Commission:

      “Every nonresident with Oklahoma source gross income of $1,000 or more is required to file an Oklahoma income tax return.”

      1. I would have to be your tax preparer in order to answer this properly. You can call the Oklahoma tax office, and ask them, or call the TurboTax line, and ask them to guide you through it.

  6. I won 15040.00 this year with no deduction and I make around 20, 000 a year working with 1 dependent how do I file my federal income tax how much will I pay back?

    1. Chan, in general you file Form 1040 and list your $20,000 in earned income on Line 1, and then your gambling income of $15,040 on Line 21. TurboTax should walk you through this.

      If you file as Single with one dependent, then I believe your tax due calculates as follows:

      Total AGI for Lines 37 and 38
      is $35,040. Now subtract your Standard Deduction of $6200, and your two exemptions (one for you plus one for your dependent $3950 + $3950 = $7900).
      The result of $20,940 is your Taxable Income for Line 43.
      From the 2014 Tax Table, your Federal income tax due is $2685.
      A general breakdown of the $2685 is that you are paying $593 in tax on your 20k in earnings, and $2092 on your $15,040 in gambling winnings.

    2. Also Chan, you may qualify to file as Head of Household, and may quality for tax credits because of your dependent, which will make your tax bill less, and may even qualify you for a refund. I believe TurboTax will walk you through the steps necessary to determine your correct filing status, and what tax credits you will receive.

  7. Hello,
    I live in NJ and I have gambled in multiple places. I have a record of winning $35,576.00 in PA and never filled a W2-G. Also a -$7,000 lose in Atlantic City overall. (all documents from casino) This is a net of all wins. I made $7,932.00 in my job, which i Had quit in April to continue my education. I have paid over 16,000 on school tuition s in 2014 alone.How much will I owe in taxes?

  8. Hi, I won 5,000 on slot machine in an Indian reservation casino in CA. This is first time I won an amount this big. Prior to wining I withdrew money from my credit card at the same Indian casino in order to play. I didn’t use casino’s gaming card in the slot machine that I was palying to keep track of how much lost prior to wining the 5000.00; How do I show my losses?. Can I use the credit card withdrawal receipts to offset part of my wining? Please advise

    1. Sue, you show your losses by keeping a gambling diary.

      Your gambling diary should include:

      1) Date and type of gambling activity or wager placed
      2) Name and address of the establishment at which you were gambling
      3) Names of any other persons who accompanied you while you were gambling
      4) Amount you won or lost

      You can deduct your total losses only up to the total amount of your winnings, if you are able to itemize those losses on Schedule A.

      You keep your ATM receipts, and other receipts to support what you have entered in your gambling diary.

      You do not simply take a $500 ATM withdrawal receipt, and claim a $500 gambling loss.

      Finally, I believe you should be using a player’s card to track your play, as doing this will generate a win/loss statement from the casino that will also support your gambling diary.

    1. Susan, the answer to your question depends on your situation.

      In general you pay Federal income tax on your total winnings. Your total winnings come from adding up the wins from your individual winning sessions.

      You can only deduct your total losses if you can itemize them on Schedule A of your Federal tax return, and you have a diary detailing your gambling wins and losses. Your total loss comes from adding up the losses from your individual losing sessions.

      Last I checked, the IRS still does not define a gambling session. I encourage you to do a Google search of, “Definition of gambling session,” and familiarize yourself with some of the definitions in the articles. I especially like the work of attorney Brad Polizzano at Pokerfuse: Taxation of Gambling: Introduction and Recordkeeping.

      I also like the quick definition at TaxSamaritan:

      A basic definition of a gambling session for a gambler tax payer is a period of continuous play without cashing out. However, a session cannot last more than one day.

      Now let’s look at your situation both ways – whether you can deduct your total losses or not. We will pretend you won $12,000, and lost $4,000, leaving you
      $8,000 up.

      Example if you can deduct total losses:

      Total of winning gambling sessions to put on line
      21 of your Federal 1040 form……………………..$12,000

      Total of losing gambling sessions itemized
      on Schedule A…………………………………………

      Taxable amount of gambling winnings…………$ 8,000

      Example if you cannot deduct losses:

      Total of winning gambling sessions to put on line
      21 of your Federal 1040 form…………………..$12,000

      Cannot deduct gambling losses………………..

      Taxable amount of gambling winnings………$12,000

      Susan, note also that you did not tell us what state you live in, and in what state you have won the money. Some states do not allow one to deduct any gambling losses, and tax the individual on gross winnings. The above examples are for your Federal income tax.

  9. I have won over $40,000 in total on all my jackpots. Yet I don’t work and live on VA disability and live in California, how would this affect my taxes ?

    1. Matthew, if you are a single male under age 65, then you will list the $40,000 total gambling winnings on Line 21 of your Form 1040. Based on the facts given, that will be your only source of reportable income.

      Your VA Disability Benefits are not taxable if you meet the conditions for exclusion as listed in IRS Pub. 525 under Military and Government Disability Pensions. For my reply, I am going to assume that your benefits are not taxable.

      After subtracting your Standard Deduction of $6,200, and your personal exemption of $3,950 from your Adjusted Gross Income of $40,000, we end up with your taxable income of $29,850.

      From the 2014 Federal Tax Table, you will pay Federal income tax of $4,020 on $29,850 of taxable income.

      Note that if you kept a gambling diary, you may be able to deduct your gambling losses on Schedule A, instead of using the Standard Deduction above of $6,200.

  10. I live in PA but won a jackpot of a little over $11,000.00 in Atlantic city NJ, at the time of the win they took 28% of it for tax purposes . my question is do I owe anything else from that or do I get any refunded when I do my taxes ? thanks

    1. Mike, the answer depends on what your other income is for the year, as that will determine your overall tax rate.

      For example, if your other income put you in the 35% tax bracket, then you might owe more than the 28% that Atlantic City (AC) withheld.

      From the facts given, you have income of $11,000, of which AC withheld 28% ($11,000 X .28 = $3,080).

      For your Federal Form 1040, your have income on Line 21 of $11,000, and Adjusted Gross Income on Line 37 and Line 38 of $11,000.

      Line 38 Adjusted Gross Income……………………. $11,000

      Line 40 Standard Deduction………………………..

      Line 42 Personal Exemption……………………….

      Line 43 Taxable Income………………………………$ 850

      Line 44 Tax………………………………………………..$ 86

      Line 64 Total Income Tax Withheld
      (By Atlantic City 28%)…………………………………$ 3,080

      Line 75 Amount You Overpaid
      ($3,080 minus $86 = $2,994)……………………….$ 2,994

      Refund due Matthew is $2,994

      Matthew, note that you may owe state income tax on the $11,000. After you properly input the data, I believe TurboTax should alert you to any state obligations.

  11. I make about 40,000 a year… I won about 25,000 on gambling machines in Illinois all together… how do I prove that I spent as much winning that about and about how much tax will I pay?

    1. Mari, in order to prove your gambling losses, you must keep a gambling diary detailing each of your gambling sessions, and what you either won or loss for each session. If you read some of the material available on the Internet, you will find that tax advisers want you to keep the diary as detailed as possible.

      For example, for slot play, you might go so far as to note that you played on the Beverly Hillbillies machine #1208 from 1 PM to 1:25 PM and won $28; then moved to the Titanic machine #1803 and played from 1:30 PM to 2:17 PM, and lost $42. The floor manager on duty was Susan X.

      Then you want to have receipts that back up what you have in your diary, including parking receipts, food receipts, show receipts, etc. You especially want to have your win/loss statements from each establishment where you gambled.

      From the facts given, you do not have a gambling diary, in which case your $25,000 in winnings will be included in your Federal taxable income.

      What you might look into is whether your CPA or Tax Attorney will sign off on a reconstructed gambling diary that you would create now. That is beyond my scope at this time, and may not be allowed.

      If you are NOT able to deduct the $25,000 in gambling losses, then your Federal income tax will be:

      Line 37 and Line 38: Adjusted Gross Income
      ($40,000 + $25,000 = $65,000)…………………………….. $65,000

      Line 40 Standard Deduction…………………………………
      Line 42 Personal Exemption………………………………..

      Line 43 Taxable Income…………………………………………$54,850

      Mari, your Federal income tax will be $9,575.

      However, if you do consult a licensed CPA or Tax Attorney, and he/she says you can deduct the $25,000
      in gambling losses, then your Federal income tax should be $4,950.

      One red flag. When I last checked, Illinois does not allow the deduction of gambling losses at all. I am afraid this means that you will be including that $25,000 of gambling winnings on your state tax return period.

  12. In2014 I won $29,000 in Ohio lottery altogether. When I won 25,000 Ohio lottery mailed me a 17,750 check ($7,250 was took out for taxes) and the other wins were a 1,000 and (2) 500 and about $2,000 in small amount wins. I lost approx. $5,500 in gambling losses. I am self employed and brought in $10,000 and I am head of household with 3 dependents. A few people have told me that I would receive a lot of the taxes back that they took out on my $25,000 winning. What is my approx. Refund estimate? Thanks for your time

    1. Lynn, based on the information given, for a single woman under 65 years of age, you would have an adjusted gross income AGI of $34,700. Less your Standard Deduction and your Personal Exemption, you would have taxable income of
      $24,550.

      Your total Federal income tax from the 2014 Tax Table would be $3,233.

    1. Lynn, provided that you can deduct the gambling losses of $25,731 on your Schedule A (you have your gambling diary and supporting documentation), then
      your Adjusted Gross Income would be $41,408, and your Taxable Income on Line 43 of your Form 1040 would be $11,727.

      I believe your Federal income tax from the 2014 Tax Table would be $1,305.

      If you file a Michigan state tax return, note that as of my last read, Michigan does not allow the deduction of gambling losses at all. This means that you will pay Michigan state income tax on gambling income of $41,408, with no gambling deduction. You will know when you input the data into TurboTax.

      1. I live in Wisconsin. I just want to prepare myself. I went to the casino where I won the $41,408 and they printed out a detailed summary of the winnings & losses.

  13. I have won approximately 10,000.00 this year between horse racing, and Maryland Keno, I have W2 G forms for all, I also have saved losing tickets to offset the $10,000.00 in winnings, my question is do the losing tickets have to correspond to the type of game played, example, if I won 5,000.00 in keno do I have to have 5000.00 worth of losing keno tickets or can it be losing scratch off’s as well.

    1. Kay, I am going to assume that you are a Maryland resident.

      For Federal income tax purposes, the tickets do not have to match up. As with other types of gambling, you should have a gambling diary detailing each session of gambling.

      As your gambling diary relates to buying Keno tickets, and especially scratch off tickets, you want to write down the name and address of the store where you purchased the tickets, the time and date you made the purchase, how many tickets you purchased, and how much you spent. As I am not familiar with Keno tickets, there may be other details about those that you could include in your diary that would make the diary better for an audit.

      Your diary should include the details of your redemptions of your winning tickets.

      I would consult a Maryland licensed CPA or Tax Attorney, familiar with these types of gaming and gambling issues, to make sure that your gambling diary includes enough detail to hold up on audit. For example, what is a “session” of lottery ticket and Keno ticket buying?

      This person should also be able to explain the differences between Federal and Maryland state law regarding the treatment of gambling winnings and losses. Maryland gambling tax rules may be more involved than other states.

      For example, I am gathering from the Maryland Comptroller site that you are expected to file estimated taxes, using Form 502D, if the casino/entity does NOT withhold STATE TAX from your winnings. See this quote from the site:

      You must file a declaration with payment in full within 60 days
      of receiving $500 or more of income from awards, prizes,
      lotteries or raffles, whether paid in cash or property if Maryland
      tax has not been withheld.

      At another place on the site, they appear to include racetrack betting in the 60-day requirement.

  14. I won 20,000 in Missouri and I live in illinois, state tax was taken out, do I file 2 state? I also lost 22000 at same casino I won at, do I get to show my loss?

  15. What form of proof do you need for gambling losses? ATM Bank withdrawls? I won approx 3906.00 in Arizona and 3945.00 in Vegas, a total of 7851.00. I moved to Arizona 8 months ago and have to file Illinois taxes partial year and Arizona. I made approx 8000.00 from my job in Illinois and 15231.00 in Arizona. How much will I have to pay back in taxes? I have losses of approximately $3000.00.How can I report this?

    1. Sue, the form of proof that you need for your gambling losses is a gambling diary that details all of your winning and losing sessions for the year. It should include:

      The date and type of the specific wager or wagering activity.
      The name and address or location of the gambling establishment.
      The names of other persons present at the gaming establishment.
      The amount(s) won or lost.

      Also, be sure to obtain your win/loss statements from the casinos, and keep any receipts that document your play, and your presence at the casino: examples include receipts for ATM withdrawals, parking, food, shopping, shows, etc..

      For your $3,000 loss, you will report that as an Itemized deduction on your Federal tax return, if you are able to itemize your deductions on Schedule A of Form 1040.

      By entering your data accurately, TurboTax should generate the correct amounts that you need to pay to Illinois and Arizona.

      Note that as of last check, Illinois does not allow the deduction of gambling losses from gambling winnings. You will not be able to itemize your gambling losses on your Illinois return.

      You may be able to itemize your losses on your Arizona return.

  16. I made 21600 this year and won 2080 at a casino. I live in California. No taxes were paid on my w2g. I am a single mom with 2 kids. How much tax am I going to pay for my winnings.

  17. Hi. I won $3228 on a slot machine in an indian casino in Florida. I lost $900 that day before i won it. I have been to the same casino earlier in the year and lost about $400. I make $28,500 annualy and maybe ill make $31,000 after bonuses from work. How much will i have to pay in taxes? Thanks for your help!

    1. First, we start with your total income which consists of $31,000 in pay + $3228 in gambling winnings = $34,228.
      Then we subtract your Standard Deduction of $6200, and your Personal Exemption of $3950 to arrive at your taxable income of $24,078.
      From the 2014 Tax Table, your total tax is $3158.
      Note that we cannot deduct your gambling losses of $900 + $400.

  18. I recently won $6200 playing Black Jack. I’ve never won more than a couple of hundred dollars in my life and have never reported anything in the past. I did not receive a W2-Gs. My household taxable income will be about 90k for 2014 with 2 dependents. I own my home and and have paid roughly 16k this year in childcare. How will this affect mt 2014 return?

    1. You will report the $6200 on Line 21 of your Form 1040. Of that amount, you will pay roughly between $1200 – $1500 in Federal Income Tax.

  19. What if I won $5000 in roulette. I made $26890.00. Last year at work. I do have a part time job which time job which was $4300. I live in Texas and not married and no kids and live at apartment complex. How much of that $5000.00 will I get to keep or will I keep anything at all?

    1. Hi Omar.
      First, we calculate the tax that you would owe for 2014 without including the $5,000.
      Your income is then $26,890 + $4,300 = $31,190.
      From that amount we subtract your Standard Deduction of $6,200, and your Personal Exemption of $3,950 to arrive at your taxable income:
      $31,190 – ($6,200 + $3,950) = $21,040
      From the 2014tax table, your total Federal Income Tax for 2014 is $2,700
      Now let’s add the $5,000 roulette winnings, giving us your total taxable income of $26,040. ($21,040 + $5,000 = $26,040.)
      From the 2014 Tax Table, your total Federal Income Tax is now $3,450.
      The $5,000 in roulette winnings caused an increase in your tax bill of $750 ($3,450 – $2,700 = $750).
      The answer to your question is that you will get to keep $4,250 of your $5,000 in winnings ($5,000 – $750 = $4,250).

      1. Hello thanks for replying. I wasn’t certain if the process was different in other states. I live in Texas what happened last year was my primary job was a high amount like $2700 however because I had a second job my return came to be somewhere between $600-$400 dollars because my primary job was could only be covered and not my second job. I apologize I’m not too familiar with the terms here, what I’m trying to figure out is will I get that small amount of $400 again or will I end up owing money because of the $4250 in gambling roulette winnings. (Also is that $4250 which was $5000 already taxed once it’s won at the casino?)

      2. Omar, looking at your January 9 question, I first am understanding that you received a refund last year of around $400.

        This year, I believe that you are going to owe about $350 – $450 in income tax, rather than receiving a refund of $400. This will be because of the roulette win.

        Your other question: The casino does not tax the roulette win. Instead, they often take some of the money, and withhold it for Federal or State income tax. You then have the opportunity to get some or all of that withheld money, depending on your tax situation at the end of the year.

        When you won the $5,000, did the casino withhold some of the money, or did they give you the whole $5,000?

  20. Is there an limit on the total amount of gambling losses you can write off? if you win 100,000 but lose 100,000 do you owe anything?

    1. The limit that you can write off is equal to the amount of your total winnings. For example, if you won $100,000, and lost $200,000, then you can write off $100,000. You cannot take a loss of the remaining $100,000.

  21. Hi. I’ve have W2 forms from jackpots adding up to about $160,000. I gave all of that back plus an additional $76,000. I had state taxes taken out, but not federal. I made about $180,000 this year at my job which i have paid taxes on. Approximately how much will i owe when i have to pay taxes? James?

    1. First, you have to be able to document the $236,000 in losses, or at least the $160,000. This means you will not only want your win/loss statements from the casinos, but you must have your log book as required by the Federal Revenue code. You will also want to keep any receipts supporting that you were at the casinos on the dates you claim.

      The idea being that once you claim the $160,000 in losses on Schedule A, in order to zero out your $160,000 in winnings that you report on Line 21 of your 1040, then your are going to want to be able to prove those losses.

      You will then pay income tax on the $180,000 that you earned on your job.

      Note that the above only addresses your Federal income tax situation. States handle gambling winnings and losses differently.

  22. Hello. I am unemployed this year. I didn’t collect any unemployment. This summer, I played a freeroll tournament at Commerce where winner takes all and I won $10,000. I provided them all my info. They gave me 10k and w2g form. How much will I be paying estimate? Is gambling winnings different from income and get taxed differently or does it count as an regular income and standardized deduction applies?

    1. First, you should file a tax return for 2014. If that $10,000 remains your only income for the year, then you will owe no Federal income tax. If you are a California resident, then I believe you will owe no CA state income tax on the $10,000.

  23. I live in Arizona.

    I won $1500 in a slot play, although my losses is greater than that amount.

    That was my only income for the year. How do I file taxes with IRS on that amount?

    Can I offset my losses, so I don’t have to pay taxes?

    Many thanks in advance for your kind reply and help.

    1. You simply file a Federal income tax return reporting the $1500 in gambling income. If this remains your only income for the year, then you will owe no Federal income tax.
      Note that you may NOT be required to file a Federal tax return, but one of my teachers says that the receipt of a W2-G requires the filing of a Federal tax return, no matter how low the amount.
      If I have a chance to check Azizona tax law, then I will do a follow up post.

  24. SAY YOU GO AND CASH YOUR CHECK THAT YOU PAY TAXES ON THEN GO GAMBLE AND WIN THEN YOUR ARE TO REPORT YOUR WINNINGS SO THAT THEY CAN BE TAXED…ISNT THAT MONEY BEING DOUBLE TAXED

  25. I am 71 at tax time I will have turn 72. this year 2014 I won 10,000. at Indian casino what amount of taxes do I have to pay?

    1. Can you please post what your other income is for the tax year? For example, are you receiving Social Security now, and if yes, then how much? If the 10,000 win is your only income for the year, then you do not owe any Federal income tax. You may owe state income tax depending on what state you live in.

    1. Filing SINGLE for 2014. Income $310,000
      First subtract your Standard Deduction of $6200 and your Personal Exemption of $3950. Your taxable income for Line 43 of your Form 1040 is now $299,850.
      Multiply $299,850 by 33% (.33) = $98,950.50
      Subtract $16,141.75 from $98,950.50 = $82,808.75
      Your total Federal Income Tax for 2014 is $82,808.75

  26. Hi . I won almost 10.000$ in total jackpots . They take my SSN . But I lost all that money plus even more then win in same day . So my problem is I don’t have any proofs that I lost it , but casino got proof of my win . Will I pay taxes from that 10k or I can report my loss ?

    1. You can report a loss of 10,000 on your Schedule A, provided you can document the loss by following the rules for deducting gambling losses. Also note that if that $10,000 win were your sole source of income for the year, then you would owe no Federal income tax for that year.

  27. Hi, I am asking the following question for my 84 year old grandmother. She went with a friend to a casino in Miss and won $1700 on a pull machine. She cashed in the ticket and of course Miss took out their state taxes as well as take her personal info of SS#, DL… Well she lost $1200 of the $1700, Now she is frantic, she isn’t sure what she will owe.. she only gets her social security check each month, no other income. When I do a 25%, something I found online says that’s the standard % taken out, that will end up being $425 she will owe.. can anyone help.. not sure since she only has social security each month if she still has to pay.. thanks in advance.

    1. Hello Tammy. This is in regards to answering your question. So. Basically the low down according to the Social Security Administration in my town is as follows. I spoke to a manager there regarding this kind of a situation and his answer was that supposedly if you’re on SSDI instead of SSI, that you still have to report it. Obviously they’ll know that you won wether or not you reported it by your name address and S.S.# etc, but it’s up to them as to tax you or not. And chances are. On SSDI they won’t. SSI. Yes they will. It happened to my boyfriend. He’s on SSI. For an $1,800 jackpot. They took $203. Hope this helps you clarify the situation. Anyway. Tell her to save some money ok. Take care and God Bless.

    2. Based on the facts you have given, your grandmother will owe no Federal income tax on that $1700. I have posted the SSI formula for additional income way down in these posts. If you need me to post it up here, then please just reply again to this post and let me know.

      I do believe that your grandmother should file an income tax return for the year that she won the $1700. While the receipt of a W2-G may not require the filing of a Federal income tax return, one of my income tax instructors says to always file for the years that you receive a W2-G.

  28. Can anyone assist me in determining about how much in taxes I will owe?

    I live in Las Vegas. I’ve won about $570,000. I make about $45,000 a year.

    It’s my understanding there is no state tax for the income (NV). About how much in federal taxes would I owe?

    Aside from that, thousands of dollars have been lost. Based on my information, and the profit/loss statement, should this help in the amount of taxes I will owe?

    Thanks so much!

    1. Bill, you don’t give us the total amount of your losses for 2014. Based on the information you have given, we start with your income for 2014 of $570,000 in winnings, plus the $45,000 in earned income, for a total income of $615,000 ($570,000 + $45,000 = $615,000).
      From the $615,000 we subtract your Standard Deduction of $6200, and your Personal Exemption of $3950, to arrive at a total taxable income of $604,850.
      Using the 2014 Tax Table, we then multiply $604,850 by 39.6% (.396) to arrive at $239,520.60.
      We then subtract $42,954.25 from the $239,520.60 to arrive at $196,566.35.
      Your total Federal Income Tax for 2014 is $196,566.00.
      Note that if you are able to deduct your gambling losses on Schedule A, then your tax bill will be lower.

  29. I won $21000 and trying to file late, I paid $900 calif. state taxes which I thought it was a right numbers. Turbo Tax says I owe IRS $1100 but get refund of $867 from state? I don’t know how they calculate!!!!??? I also claimed $21000 loss. My acct. say Tubo considered you winnings as lottery and that is why. Pleas help

    1. The state of California does not tax California Lottery winnings. Note that I mean specifically CA Lottery winnings. Other gambling winnings are taxable.

  30. Hi I need help! A friend of mine wants me to cash a 10,000 ticket she won’t from keno but I’m afraid it will effect my taxes at the end of the year because I’m the one who cashed it and “won” but in reality Didn’t get a dime of the money just trying to help a friend out because she can not find her social security card and I have mine what should I do???? She’s leaving today at 1pm!!

    1. Sorry for the late reply …but i hope you didn’t do it. Yes it will affect your taxes. I had a similar ex perience with someone i didn’t even know. He asked me to cash out his ticket and said he would give me half! Of course i said no .I somehow think he may have been dis-associated from the 3 casinos in Detroit .. which means he would possibly be arrested for even being there if he tried to cash out.

  31. Hi I won a race at a race track in oklahoma it was about 10000.. thats what the check they are sending me… about how much am I gonna have to pay come imcometax

  32. If I lost $5000 and won $0 in entire year, and if my income is $65,000 per annum, do i get tax returns
    what i am paying to federal & state?

  33. my wife won 3000 in slot machines and we clain taxes together but she doesn’t work how much do we have to paid in taxes in nyc.

  34. Hello,

    I live in Las Vegas and I play high limit slots $25, $5 regulary and I have more than 100 W2Gs only from 2013 and I dont’t even have them all. I’ve lost $250k based on casino’s statment. In this case, would I be taxed more than $250k possibliy even though I’ve lost $250k already? I don’t think casino took out any percentages out of my willing jackpots. please help.

  35. I have 5 W-2G forms for $1200 each that I won at slots in Michigan Jan – Mar 2014. I was not smart enough to have taxes taken out. The casino never asked me either. What will my federal tax rate be on these winnings?

    1. Caroline,

      The total of $6,000 will be taxed as ordinary income on your tax return . The tax rate will depend on how much total income you have.

      For example, if the $6,000 is your only income for the year, then you will owe no tax.

      1. Caroline,

        W-2G forms are just one piece of the puzzle. At the end of the year, you’ll have a decision to make in regards towards how to file.

        You should get a win / loss statement from all the casinos you frequent and weight that figure (win or loss) against your standard deduction on federal tax forms if you don’t file long form for 1040. If you already file long form to take mortgage deductions, ect., then there’s no decision that way.

        Based on your win / loss statements, file the winnings as income and deduct the losses against it. If you have a NET loss, you can only deduct the amount against your winnings to result in a zero gain. You can’t deduct losses greater than winnings unless you’re a professional gambler and make your living doing so. (have to prove this…)

        Finally, as a State of MI filer, since MI uses your Adjusted Gross Income from federal form 1040 as the base income for filing MI income tax, and there is NO PROVISION in schedules to offset losses against those included wins, you’ll have to pay income tax on winnings for the State of MI no matter what! I didn’t know this until 2013 filings when I had $40k+ in W-2G forms even though I ended up a net loser (married filing jointly, my wife lost quite a bit!). In the end I had to pay 4+% income tax on shown winnings even though I had net losses! MI is one of the few states that does things this way (surprise, the tax and spend capital of the U.S.?) unfortunately. I know I’ve altered my gambling course radically, because of this.

      2. Thank you for a pretty clear explanation. I am now putting $$ away each month with the hope that i will have enough by tax time to pay for my “wins”. Lesson learned!! Anybody for my advice ?? STOP GAMBLING! It’s the most dangerous past time anyone can get involved in. If addiction has already hit you ..as it did me ..consult Gamblers Anonymous. I am in the program and it’s the best thing that’s happened to me in a very long time.

      1. Yes. I understand that now. Michigan State tax is the one that will get me. Any Michiganers have an idea of how much i should put aside?

  36. Ok, I have a question. I have been to the casino near me pretty regularly. I’ve won and lost (losing more than winning mostly). I just got a copy of my win/loss statement the other day. According to the statement, I have wagered 5,000, won 4,500 Loss (500). Does this mean, come tax time, I will not have to pay any taxes since I am in the negative?

    1. Hi,
      You will have to claim your winnings, but you can also deduct your losses if you itemize your tax deductions. TurboTax will ask you the necessary questions for that you can accurately claim your winning and losses.
      Thank you,
      Lisa Greene-Lewis

      1. Lisa,
        If all Postolsfiring has is a year-end win/loss statement from the casino, how will he ever be able to report wins or losses. IRS says he can not net wins and losses. Even you said he must itemize to deduct losses. If all you have is a year end win/loss statement from the casino, how do you do that?

  37. I won 1,500 on a scratch ticket in CT the tax rate is 6.7 here. How much tax will they take out Thanks to who ever Helps me

  38. What if you wager on sports through an international, online betting website that has no “federal jurisdiction” in the US? Does that need to be subjected to US Tax Law even though the transactions occurred outside of the country? That seems absurd to me if so.

  39. Free slot pay
    If you win free slot play and actually don’t receive any money and are not sent a 1099 gambling winnings are you required to pay taxes on the amount of free slot play

  40. Hi! I didn’t claim my winnings. They were ” small” a couple $1200 or 1500. Winnings. I now received a bill from the irs. Can i go back and get my losses for last year and try and negate it? Or because i never claimed it , is it too late?

    1. Hi Pam,
      You can go back and amend your tax return. Just remember you have to be able to itemize deductions in order to claim gambling losses and your losses can not exceed your winnings. TurboTax will walk you through amending your tax return.
      Thank you,
      Lisa

      1. Not only do you have to be able to itemize, but you have to have a diary. If I was the IRS agent, and you didn’t report any wins, then suddenly came up with a diary of all you casino activities, I’d want to audit every entry…
        I’m not a tax expert, but my personal opinion is that in your case you’d be best off to just pay the taxes on the “small winnings”, and start keeping a daily diary for future use.

  41. I have question if I win 9500 at black jack do I have to pay taxes if not could I continue doing this repeatedly?

    1. According to the IRS, you must keep a diary and report all winnings. However, there are no W-2G’s issued at the table. Large cash transactions do get reported.
      Could you do this repeatedly? The casino has the odds in their favor, so to do it repeatedly, you’d have to be counting. If so, GO SEE THE MOVIE “21”.

  42. How much federal taxes should I have withheld from a $50,000 cash prize. Also, how much state tax should I withhold? I live in Upstate NY.

    1. Don’t withhold any tax unless you’re a federal employee, you won cash from a gambling event under federal jurisdiction, and you make a “voluntary agreement) with your employer to have tax withheld. Title 26 subtitle C and the IRS Federal, State, and Local Government’s semiannual newsletter is proof that gambling tax by the Federal Government applies only where the Federal Government controls the gambling event.

      1. Don’t withhold any taxes? I have to pay federal and state taxes on the cash prize I won, don’t I?

      2. No, the law does not require a non-federal individual to pay federal income tax, see subtitle C section 3401(c) where a employee is defined as a “federal worker” for payment of income tax, and note sections 3403 and 3404 where the employer is made liable for collection, making a return and payment of tax. Gambling cannot be lawfully taxed outside of federal jurisdiction.

      1. Mark, using rough numbers from the Federal tax table, and the 2013 NY State tax table, you would go $6,000 Federal withholding, and $2,800 State withholding.

      2. James really believes that most Americans are “taxpayers” for federal tax purposes, since he has told Mark how much taxes he would pay to the State of New York and to the United States. James most likely has never opened the IRC, Title 26 or its Regulations. He too is a “taxpayer”, committing perjury every time he signs a Federal tax form. in essence he is giving his hard earned money earned from a employer, to the IRS. The Government never turns down gifts in money from anyone!

      3. Just who is the IRS? You must know who this entity is and how it obtained its name. If you don’t know, then you will listen to the IRS and you will pay any tax they say you owe.
        Knowledge is power!

      4. I am not a federal worker and if I don’t pay the income tax now then in April when it is time to file my return they will want the money.

      5. t’s right Mark, they will “want” your money because you have always sent them money as a free gift. But, even Federal workers send in their money as a free gift since they have the choice of being liable or not liable for the tax.

  43. My win/loss statement says est tracked cash in $68,668.70, est tracked cash out $68,418.41, estimated tracked jackpot ($66793.41) and estimated tracked net win (net loss) ($250.29). What exactly do I report for tax purposes?

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