So you won some money from gambling, and you want to know if you have to pay the Government, income tax on your winnings. The short answer is yes, but there are some exceptions to the rule.
If you have gambling winnings, you are 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 earnings .
If you experience a loss in gambling, you are allowed to reduce your loss, up to the amount you won. You are not allowed to reduce gambling losses in excess of your winnings, and you are not allowed to transfer your losses from one year to another.
Form W-2G is used to report gambling winnings from, internet, online, casino, sports betting, horse racing, lottery, bingo and other legal gambling activities.
You will receive a Form W-2G if:
Income tax is deducted from your winnings You
win at least $600 or more and your winnings are at least 300 times your bet amount Your
winnings are from slot machines or bingo of $1200 or more
Your winnings are from keno of $1500 or more.
How to deduct your losses from your winnings
To avoid paying gambling taxes, you must itemize your losses on a Schedule A tax form (deductible itemized). As with most detailed deductions, you are required to keep a record of your gambling wins and losses. You must keep the date, time, type, place, ticket, receipt and other records you have as evidence.
By keeping accurate records of online, internet and casino gambling, you can pay less taxes when you win. When you pay less gambling taxes, you win more!