Taxation On Blackjack Winnings
and suppose the next 3hr or days you manage to win that 3k-5k$ right back, do you owe taxes on your winnings but not really winnings just recoveries? if so thats more then a -0.5 disadvantage you are playing with , i am not saying blackjack is beatable but with 1-10 spread or 25-250 needing atleast 29 grand right off the bat knowing you could lose 1/2 of it in a short time and having the pit boss say off the floor with you like Colin jones had on youtube video it all seems like a giant head if you owe the tax man money on your break even bets lol but again im sure you can extract money from the tables so many have claimed so in the past...
Even if you win $1, you owe $0.25 in taxes. Now unless you get a W2-g taxes aren't automatically taken out. So it is on you to track and report your winnings. To be fair, 99% of people who don't get a W2-g do not report gambling winnings.
- The IRS requires U.S. Nonresidents to report gambling winnings on Form 1040NR. Such income is generally taxed at a flat rate of 30%. Nonresident aliens generally cannot deduct gambling losses.
- If you win a blackjack tournament you are required to let the IRS know. Either the casino where the tournament is held will take the tax out of the winnings or you must declare the winnings and pay directly to the IRS, or the tax office in your country. In the United States, tournament tax is usually around 30% of your winnings.
- Table games (blackjack, poker, craps. Any other gambling winnings subject to federal income tax withholding; In certain cases, federal income taxes will be withheld from your gambling winnings.
- A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040 (PDF) as 'Other Income' (line 21), including winnings that are not subject to withholding.
What if I go on monday and lose 1k, then go on Friday and win 1k. Again is that 1 week long session or 2 separate sessions? What about the year? Is it 1 long session or many many throughout? There is always debate on what is correct.
thats dumb and retarded to the 5th power, does the casino assist the government on your wins/losses?
i guess i should make things more clearer, what is the legal stand point ? if you lose 2k$ in 2 weeks and win 2k$ in 2 weeks you really do owe taxes on 2,000 win?
thats dumb and retarded to the 5th power, does the casino assist the government on your wins/losses?
That is my point. The legal stand point is so ambiguous that there is no clear cut definition. Casinos however do not assist in tax related matters unless they issue a 1099 or w2g.
if they dont log your actions i guess you claim what you 'felt' was a win
so if i win 3k-5k$ do they have me sign anything at the table or cage? god thats so stupid when your down the hole your really down the hole times two x2
if they dont log your actions i guess you claim what you 'felt' was a win
They don't do forms for wins on tables unless it is a huge side bet win.
Gambling taxes are mostly an on your honor type thing.
so if i win 3k-5k$ do they have me sign anything at the table or cage? god thats so stupid when your down the hole your really down the hole times two x2
if they dont log your actions i guess you claim what you 'felt' was a win
If you are gambling large amounts and are really that concerned, do yourself a favor. Find a seasoned tax attorney, preferably a CPA, plunk down a few hundred $$ and have him answer your questions. Short of that, spend a few hours researching on the web.
The fact is that for most, this won't be an issue. The IRS is doing fewer and fewer audits each year. Less than one in a hundred returns are being audited. A tax pro can tell you how to avoid red flags that can raise IRS suspicions.
Topic 419 - Gambling Income and Losses
The following rules apply to casual gamblers. Gambling winnings are fully taxable and you must report them on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income, or review How Do I Claim My Gambling Winnings and/or Losses?
Gambling Winnings
A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040 (PDF) as 'Other Income' (line 21), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. If you are considered a nonresident alien of the United States for income tax purposes and you have to file a tax return, you must use Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. Refer to Publication 519, U.S. Tax Guide for Aliens, and Publication 901, U.S. Tax Treaties, for more information.
Gambling Losses
You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an 'Other Miscellaneous Deduction' (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.
Recordkeeping
It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.
https://www.irs.gov/taxtopics/tc419.html
I do know that some people write about how they are treated in an audit situation, etc. but starting with the information above, and diving deeper into it with all the links if necessary, is the place to start. The key that I always see mentioned is to have good Recordkeeping. Without that, the auditor can easily disallow a lot of things should they be so inclined and you would not have room to fight their decision since you did not follow the basic rules.
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Do you like to gamble? If so, then you should know that the taxman beats the odds every time you do. The Internal Revenue Service and many states consider any money you win in the casino as taxable income. This applies to all types of casual gambling – from roulette and poker tournaments to slots, bingo and even fantasy football. In some cases, the casino will withhold a percentage of your winnings for taxes before it pays you at the rate of 24 percent.
Casino Winnings Are Not Tax-Free
Casino winnings count as gambling income and gambling income is always taxed at the federal level. That includes cash from slot machines, poker tournaments, baccarat, roulette, keno, bingo, raffles, lotteries and horse racing. If you win a non-cash prize like a car or a vacation, you pay taxes on the fair market value of the item you win.
By law, you must report all your winnings on your federal income tax return – and all means all. Whether you win five bucks on the slots or five million on the poker tables, you are technically required to report it. Job income plus gambling income plus other income equals the total income on your tax return. Subtract the deductions, and you'll pay taxes on the resulting figure at your standard income tax rate.
How Much You Win Matters
While you're required to report every last dollar of winnings, the casino will only get involved when your winnings hit certain thresholds for income reporting:
- $5,000 (reduced by the wager or buy-in) from a poker tournament, sweepstakes, jai alai, lotteries and wagering pools.
- $1,500 (reduced by the wager) in keno winnings.
- $1,200 (not reduced by the wager) from slot machines or bingo
- $600 (reduced by the wager at the casino's discretion) for all other types of winnings but only if the payout is at least 300 times your wager.
Win at or above these amounts, and the casino will send you IRS Form W2-G to report the full amount won and the amount of tax withholding if any. You will need this form to prepare your tax return.
Understand that you must report all gambling winnings to the IRS, not just those listed above. It just means that you don't have to fill out Form W2-G for other winnings. Income from table games, such as craps, roulette, blackjack and baccarat, do not require a WG-2, for example, regardless of the amount won. It's not clear why the IRS has differentiated it this way, but those are the rules. However, you still have to report the income from these games.
What is the Federal Gambling Tax Rate?
Standard federal tax withholding applies to winnings of $5,000 or more from:
- Wagering pools (this does not include poker tournaments).
- Lotteries.
- Sweepstakes.
- Other gambling transactions where the winnings are at least 300 times the amount wagered.
If you win above the threshold from these types of games, the casino automatically withholds 24 percent of your winnings for the IRS before it pays you. If you cannot provide a Social Security number, the casino will make a 'backup withholding.' A backup withholding is also applied at the rate of 24 percent, only now it includes all your gambling winnings from slot machines, keno, bingo, poker tournaments and more. This money gets passed directly to the IRS and credited against your final tax bill. Before December 31, 2017, the standard withholding rate was 25 percent and the backup rate was 28 percent.
The $5,000 threshold applies to net winnings, meaning you deduct the amount of your wager or buy-in. For example, if you won $5,500 on the poker tables but had to buy in to the game for $1,000, then you would not be subject to the minimum withholding threshold.
It's important to understand that withholding is an entirely separate requirement from reporting the winning on Form WG-2. Just because your gambling winning is reported on Form WG-2 does not automatically require a withholding for federal income taxes.
Can You Deduct Gambling Losses?
If you itemize your deductions on Schedule A, then you can also deduct gambling losses but only up to the amount of the winnings shown on your tax return. So, if you won $5,000 on the blackjack table, you could only deduct $5,000 worth of losing bets, not the $6,000 you actually lost on gambling wagers during the tax year. And you cannot carry your losses from year to year.
The IRS recommends that you keep a gambling log or spreadsheet showing all your wins and losses. The log should contain the date of the gambling activity, type of activity, name and address of the casino, amount of winnings and losses, and the names of other people there with you as part of the wagering pool. Be sure to keep all tickets, receipts and statements if you're going to claim gambling losses as the IRS may call for evidence in support of your claim.
What About State Withholding Tax on Gambling Winnings?
There are good states for gamblers and bad states for gamblers. If you're going to 'lose the shirt off your back,' you might as well do it in a 'good' gambling state like Nevada, which has no state tax on gambling winnings. The 'bad' states tax your gambling winnings either as a flat percentage of the amount won or by ramping up the percentage owed depending on how much you won.
Each state has different rules. In Maryland, for example, you must report winnings between $500 and $5,000 within 60 days and pay state income taxes within that time frame; you report winnings under $500 on your annual state tax return and winnings over $5,000 are subject to withholding by the casino due to state taxes. Personal tax rates begin at 2 percent and increase to a maximum of 5.75 percent in 2018. In Iowa, there's an automatic 5 percent withholding for state income tax purposes whenever federal taxes are withheld.
Taxes On Blackjack Winnings
State taxes are due in the state you won the income and different rules may apply to players from out of state. The casino should be clued in on the state's withholding laws. Speak to them if you're not clear why the payout is less than you expect.
How to Report Taxes on Casino Winnings
You should receive all of your W2-Gs by January 31 and you'll need these forms to complete your federal and state tax returns. Boxes 1, 4 and 15 are the most important as these show your taxable gambling winnings, federal income taxes withheld and state income taxes withheld, respectively.
Tax On Blackjack Winnings
You must report the amount specified in Box 1, as well as other gambling income not reported on a W2-G, on the 'other income' line of your IRS Form 1040. This form is being replaced with a simpler form for the 2019 tax season but the reporting requirement remains the same. If your winnings are subject to withholding, you should report the amount in the 'payment' section of your return.
Different rules apply to professional gamblers who gamble full time to earn a livelihood. As a pro gambler, your winnings will be subject to self-employment tax after offsetting gambling losses and after other allowable expenses.