Income and Investments Sports Gambling and How Your Winnings are Taxed Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Ginita Wall Published Oct 29, 2018 - [Updated Mar 5, 2020] 2 min read Sports gambling has become a popular year-long hobby. Are you feeling lucky? If so, you may be headed to the racetrack, casino or sports bar to make your bet, hoping to win big. However, you might be surprised to learn that Uncle Sam has his fingers crossed for your good fortune as well. That’s because you have to pay taxes on all gambling winnings. Whether you bet on the big games; Superbowl, Stanley Cup, NBA Playoffs, World Series on the games during March Madness, here’s what you need to know about how sports gambling impacts your 2019 taxes. Here are the rules. Win at fantasy football or any other sports pool and your winnings will be considered income by the IRS. If you win at least 300 times and/or the payoff is $600 or above, the gambling facility will ask for your social security number so they can report your winnings to the IRS. You’ll also be subject to this reporting if you win $1,200 at slots or bingo or $1,500 at keno. Uncle Sam doesn’t have a place at the table during your weekly poker get-together with your buddies, but if you win $5,000 or more in a poker tournament, the sponsor will be reporting your winnings to the IRS. The news about taxes on gambling winnings doesn’t end there. The gambling institution is required to withhold 24% of your winnings as federal withholding tax, down from the previous 25% under the tax reform law. At tax time, you’ll receive Form W-2G for all reported winnings showing the amount you won and the taxes withheld. But even if you don’t receive a form reporting your winnings, you are still required to report all gambling winnings. In addition to gambling proceeds, you must report all other prizes you receive, including lottery winnings. On the deductions front, you can’t directly offset your gambling winnings with your gambling losses, but you can include the losses as miscellaneous tax deductions on your tax return in if you itemize your tax deductions. If your losses exceed your winnings, the amount you deduct cannot exceed the total amount of your winnings. Keep records of the gambling losses you claim on your tax return. You can do this by keeping a gambling log or hanging onto losing bet tickets, lottery tickets, and bingo cards. Don’t worry about knowing these tax rules. TurboTax asks you simple questions about you and gives you the tax deductions and credits your eligible for based on your answers. If you have questions, you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent with an average 15 years experience to get your tax questions answered. TurboTax Live CPAs or Enrolled Agents are available in English and Spanish and can also review, sign, and file your tax return. Have fun, and I hope that Lady Luck showers you with wealth! Previous Post How to Save Money on Halloween with DIY Next Post How to Tackle Holiday Debt Before It Begins Written by Ginita Wall More from Ginita Wall 22 responses to “Sports Gambling and How Your Winnings are Taxed” Using an online tax preparation software, I entered my lotto winnings of $2788.00, which reduced my refund by about $400, but when I entered my losses of $1757.00 on purchases of Lotto tickets, it only increased my refund by $25.00. Does this seem right, or do I need to take my tax forms to a professional, because I am obviously in over my head this time? Reply That was supposed to read “reduced my refund by $700”, not $400. Reply I absolutely disagree with this article and it is making me lose faith in Turbo Tax. Fantasy sports winnings ARE NOT gambling winnings. They ARE NOT reported on Turbo Tax and what options there might be for any deductions against us. This is a very confusing topic – I think it needs it’s own article and should not be lumped in with gambling Reply I am VERY poor…so poor I have no need to file federal tax returns at all. In the past 5 or so years I haven’t filed and figured the government could just keep any little refund I was entitled to even though I knew I was losing out on having it applied to back taxes and my student loans. But, in 2012 I won 6800 on a one dollar horse bet. Everyone I know that wins that much makes money, owns houses and cars, has jobs, etc, so they can’t advise me. Is there a way they will return the $1700 in federal money the track kept for the IRS if I file my 2012 now? My provable (online account) losses for the year might equal 1700, but not 6800, and it’s my understandingthat in horseracing it only matters what you bet THAT DAY. Reply Hello Mary Ellen, I recently won a little more than $10,000 on fantasy football. I am a Canadian citizen. Do I need to pay tax? Reply Hello, I live in Oklahoma and play the state lottery and scratchers and play at one of the local casino. I have never won enough at one time to claim, but in Sept. a group of us went to Vegas and I hit at the slot machine for 2200. Since it was in Vegas will I be taxed in Okla. and the Feds and can I deduct the air fare and hotel. Plus what about the loss on my losing lotto tickets and scratchers. I keep all my losers. Its shows I’m doing my part for the Oklahoma Education Lottery. LOL Thank You Reply I think it is criminal how much money the federal and state taxes take from lottery winnings…don’t they make enough money from all the purchased losing tickets? I hit $20k on Megamillions and check was for $14,400. 25% to the feds, and 3% to NJ. Considering how much wasteful spending there is in Washington this just infuriates me. If our government wasn’t so corrupt, it would not have bothered me as much as it did. But knowing they stole $5,600 from me is disgusting. Only saving grace is that since they took the money out I won’t owe any additional taxes on it (right?!?!?!?!?) Reply is this requirement of gambling place to withhold 25% for taxes new for 2015? Because my casino never withholds unless requested. Reply Hi Carrie, The requirement to withhold taxes only applies to winnings of $5,000 or more and does not apply to winnings from bingo, keno and slot machines. There are other rules regarding the withholding of taxes that are found in the IRS instructions for preparing W2G forms at http://www.irs.gov/pub/irs-pdf/iw2g.pdf Thank you, Mary Ellen Reply How about gambling losses, can we deduct that? Reply Hi erasmo, You can’t directly offset your gambling winnings with your gambling losses, but you can include the losses as miscellaneous deductions on your tax return. If your losses exceeded your winnings, the amount you deduct cannot exceed the total amount of your winnings. Thank you, Mary Ellen Reply Turbo tax customer for multiple years but this year I will have a problem with entering W2G. So far this year I have 64 W2G’s so far. Is there anyway to scan these in? If no will the software allow over 60 different forms be menually entered? Reply Hi James, TurboTax does not have a way to scan or import your W-2Gs. You can enter and e-file an unlimited number of W-2Gs in the federal program. However, several states have a limit on the number of W-2Gs that can be e-filed. If you are not e-filing your tax return, you do not need to enter more than the amount and the payee information from the W-2Gs. Mary Ellen Reply I sold my rental property, how do I compute the amount to file on my 1040 Estimate. I sold the personal rental property on 9/22/14. Barbara J Reply Hi Barbara, The calculation of the tax will be based on your total income, but you can estimate it by calculating the profit on your rental property and adding that to the rest of your income.Then you will need to estimate your itemized deductions. That income less the itemized deductions less your personal exemptions is your estimated taxable income. IRS Pub 505 (http://www.irs.gov/publications/p505/ch02.html#en_US_2014_publink1000194739) gives all the details, or you can use your TurboTax 2013 program to estimate your taxes. The profit on the sale of your rental property is the selling price less the selling expenses like fix-up expense and commissions less the original cost of the property (what you are depreciating plus the cost of the land) plus the depreciation you have taken (or should have taken) over the years it was rental property. Thank you, Mary Ellen Reply I play lottery. I am on SS disability. I will be 66 in March 2015. what would Social security want from me if I were to win the “big” one? Reply Hi Thomas, If you win the “big” one, or any winnings, for that matter, you will need to include the winnings in your federal income, and possibly your state income as well. The included winnings are taxable. They will also increase the amount of your SS Disability that is subject to federal income tax, up to 85% of it. IRS Pub 915 explains the rules for taxing SS Disability and other SS benefits. http://www.irs.gov/pub/irs-pdf/p915.pdf Thank you, Mary Ellen Reply Are monies that are awarded in court cases taxed? Reply Mary, It depends on why you were in the case. According to IRS Publication 525, Taxable and Nontaxable Income, page 29 “To determine if settlement amounts you receive by compromise or judgement must be included in your income, you must consider the item that the settlement replaces. The character of the income as ordinary income or capital gain depends on the nature of the underline claim.” You can find more details at http://www.irs.gov/pub/irs-pdf/p525.pdf Mary Ellen Reply no my lawyer said it was like selling a body part and that money can not be taxed 🙂 Reply My husband wins gift cards sometimes and at the end of the year the company sends him a 1099 for them. Can we also deduct our lottery losses with this? Reply The gift cards are not gambling income, they are prizes or awards, so you cannot deduct your lottery losses based on that income. Reply Leave a Reply Cancel reply Browse Related Articles Income and Investments Gambling Winnings Tax (How Much You Will Pay For Winnin… Income and Investments 3 Tax Reasons for Why You Should Think Twice Before Bet… Income and Investments Sports Betting Taxes Guide (How to Pay Taxes on Sports … Income and Investments How Do Game Show Winnings Affect Your Taxes? Tax News How Will You Be Taxed If You Win the Powerball Jackpot? Tax Planning How Your Lottery Winnings Are Taxed Tax Tips Summertime – Gambling – the IRS? Life Lottery Calculator
Using an online tax preparation software, I entered my lotto winnings of $2788.00, which reduced my refund by about $400, but when I entered my losses of $1757.00 on purchases of Lotto tickets, it only increased my refund by $25.00. Does this seem right, or do I need to take my tax forms to a professional, because I am obviously in over my head this time? Reply
I absolutely disagree with this article and it is making me lose faith in Turbo Tax. Fantasy sports winnings ARE NOT gambling winnings. They ARE NOT reported on Turbo Tax and what options there might be for any deductions against us. This is a very confusing topic – I think it needs it’s own article and should not be lumped in with gambling Reply
I am VERY poor…so poor I have no need to file federal tax returns at all. In the past 5 or so years I haven’t filed and figured the government could just keep any little refund I was entitled to even though I knew I was losing out on having it applied to back taxes and my student loans. But, in 2012 I won 6800 on a one dollar horse bet. Everyone I know that wins that much makes money, owns houses and cars, has jobs, etc, so they can’t advise me. Is there a way they will return the $1700 in federal money the track kept for the IRS if I file my 2012 now? My provable (online account) losses for the year might equal 1700, but not 6800, and it’s my understandingthat in horseracing it only matters what you bet THAT DAY. Reply
Hello Mary Ellen, I recently won a little more than $10,000 on fantasy football. I am a Canadian citizen. Do I need to pay tax? Reply
Hello, I live in Oklahoma and play the state lottery and scratchers and play at one of the local casino. I have never won enough at one time to claim, but in Sept. a group of us went to Vegas and I hit at the slot machine for 2200. Since it was in Vegas will I be taxed in Okla. and the Feds and can I deduct the air fare and hotel. Plus what about the loss on my losing lotto tickets and scratchers. I keep all my losers. Its shows I’m doing my part for the Oklahoma Education Lottery. LOL Thank You Reply
I think it is criminal how much money the federal and state taxes take from lottery winnings…don’t they make enough money from all the purchased losing tickets? I hit $20k on Megamillions and check was for $14,400. 25% to the feds, and 3% to NJ. Considering how much wasteful spending there is in Washington this just infuriates me. If our government wasn’t so corrupt, it would not have bothered me as much as it did. But knowing they stole $5,600 from me is disgusting. Only saving grace is that since they took the money out I won’t owe any additional taxes on it (right?!?!?!?!?) Reply
is this requirement of gambling place to withhold 25% for taxes new for 2015? Because my casino never withholds unless requested. Reply
Hi Carrie, The requirement to withhold taxes only applies to winnings of $5,000 or more and does not apply to winnings from bingo, keno and slot machines. There are other rules regarding the withholding of taxes that are found in the IRS instructions for preparing W2G forms at http://www.irs.gov/pub/irs-pdf/iw2g.pdf Thank you, Mary Ellen Reply
Hi erasmo, You can’t directly offset your gambling winnings with your gambling losses, but you can include the losses as miscellaneous deductions on your tax return. If your losses exceeded your winnings, the amount you deduct cannot exceed the total amount of your winnings. Thank you, Mary Ellen Reply
Turbo tax customer for multiple years but this year I will have a problem with entering W2G. So far this year I have 64 W2G’s so far. Is there anyway to scan these in? If no will the software allow over 60 different forms be menually entered? Reply
Hi James, TurboTax does not have a way to scan or import your W-2Gs. You can enter and e-file an unlimited number of W-2Gs in the federal program. However, several states have a limit on the number of W-2Gs that can be e-filed. If you are not e-filing your tax return, you do not need to enter more than the amount and the payee information from the W-2Gs. Mary Ellen Reply
I sold my rental property, how do I compute the amount to file on my 1040 Estimate. I sold the personal rental property on 9/22/14. Barbara J Reply
Hi Barbara, The calculation of the tax will be based on your total income, but you can estimate it by calculating the profit on your rental property and adding that to the rest of your income.Then you will need to estimate your itemized deductions. That income less the itemized deductions less your personal exemptions is your estimated taxable income. IRS Pub 505 (http://www.irs.gov/publications/p505/ch02.html#en_US_2014_publink1000194739) gives all the details, or you can use your TurboTax 2013 program to estimate your taxes. The profit on the sale of your rental property is the selling price less the selling expenses like fix-up expense and commissions less the original cost of the property (what you are depreciating plus the cost of the land) plus the depreciation you have taken (or should have taken) over the years it was rental property. Thank you, Mary Ellen Reply
I play lottery. I am on SS disability. I will be 66 in March 2015. what would Social security want from me if I were to win the “big” one? Reply
Hi Thomas, If you win the “big” one, or any winnings, for that matter, you will need to include the winnings in your federal income, and possibly your state income as well. The included winnings are taxable. They will also increase the amount of your SS Disability that is subject to federal income tax, up to 85% of it. IRS Pub 915 explains the rules for taxing SS Disability and other SS benefits. http://www.irs.gov/pub/irs-pdf/p915.pdf Thank you, Mary Ellen Reply
Mary, It depends on why you were in the case. According to IRS Publication 525, Taxable and Nontaxable Income, page 29 “To determine if settlement amounts you receive by compromise or judgement must be included in your income, you must consider the item that the settlement replaces. The character of the income as ordinary income or capital gain depends on the nature of the underline claim.” You can find more details at http://www.irs.gov/pub/irs-pdf/p525.pdf Mary Ellen Reply
My husband wins gift cards sometimes and at the end of the year the company sends him a 1099 for them. Can we also deduct our lottery losses with this? Reply
The gift cards are not gambling income, they are prizes or awards, so you cannot deduct your lottery losses based on that income. Reply
