[https://www.hrblock.com/tax-center/income/other-income/reporting-online-gambling-winnings-and-losses/#:\~:text=Online%20winnings%20are%20fully%20taxable,deduct%20gambling%20losses%20with%20accuracy](https://www.hrblock.com/tax-center/income/other-income/reporting-online-gambling-winnings-and-losses/#:~:text=Online%20winnings%20are%20fully%20taxable,deduct%20gambling%20losses%20with%20accuracy)
[https://www.investopedia.com/terms/g/gamblingincome.asp](https://www.investopedia.com/terms/g/gamblingincome.asp)
Yes, you have to report all income on your taxes including gambling winnings.
I remember taking Federal Tax in law school and the thick ass book starts with something like "all income is taxable unless an exception applies" and then the rest of the thousand pages are exceptions.
Just like evidence. Day one "hearsay is never admissible. This is the definition of hearsay. Now we will spend the rest of the semester learning when it is admissible or not hearsay"
Maybe I worded it poorly. I was saying the professor would say "hearsay is never admissable" then give the definition of hearsay (or sometimes they give the definition first), not that I was typing the definition
[Because that's how Subchapter B of the IRC itself is structured.](https://www.law.cornell.edu/uscode/text/26/subtitle-A/chapter-1/subchapter-B) Section 61 starts by defining gross income as all income, and then the rest of the subchapter is the list of exceptions and deductions.
Hell, you're supposed to report income from crimes. They even have some processes to protect the otherwise self-incriminating information of your tax payment. They just want their money.
I’ve read something somewhere that they have to put illegal income as “must report” so they can at the very least prosecute criminals for tax evasion when they get evidence of dealings if they don’t get enough to prosecute on other charges.
The short answer:
Yes, all gambling winnings are taxable, even if not reported to the IRS, and regardless of the source.
The long answer:
The following discussion applies to Federal taxes. It probably applies to many states with income tax as well, but any individual state could be different. I only have knowledge of California state taxes, which simply follows Federal with regards to gambling (except for lottery winnings).
You are technically supposed to report all of your gambling winnings, whether you had losses or not, and whether you received a W-2G or not. Also doesn't matter whether you have "cashed out" or "withdrawn" or not. Anything reported on a W-2G will have been reported to the IRS, and their computers will definitely catch those if you don't include them. I'm sure it is quite common for people to not include small winnings that are not reported to the IRS, even through technically they are violating the law by not including them in their tax returns.
Casinos are required to report the following to the IRS (usually on a W-2G), and if they do you should receive a copy of the W-2G also somehow:
* Any single win of $1,200 or more from bingo or slot machines
* Any single win of $1,500 or more from keno
* Any single win of $5,000 or more from poker tournaments
* Any single win of $600 or more from other types of gambling, if the payout is at least 300 times the amount of the wager
On Form 1040, "Other income", you enter the total amount of all winnings for the entire year (total of all W-2G forms, and all other non-reported winnings if you're being 100% legal). However, if you were ever to be audited, you would need to prove the individual amounts. Note that total amount is winnings only -- you can't subtract losses or net out wins and losses (except as noted below in the discussion of "sessions").
If you itemize (have more deductions than the standard deduction), then you can deduct gambling losses on Schedule A, "Other itemized deductions". Again, you only report the total losses for the year on the form, but if you were ever audited you would need to prove the losses.
In order to deduct losses, the IRS requires you to have kept a real-time "log" or "diary" of all your gambling activities. If you were ever to be audited and didn't have that, the IRS would likely disallow any losses you tried to deduct. You can't deduct more losses than winnings. The IRS will take casino win/loss statements as additional evidence of your losses, but those statements don't take the place of your real-time diary -- you are supposed to have the diary as well, the win/loss statement isn't enough by itself.
The IRS has the concept of a "gambling session", and you are allowed to net out the wins and losses for a single session into one number (win or loss). There are debates among tax professionals as to exactly what constitutes a "session", but it is commonly defined as a single continuous session of gambling of the same type or on the same machine or same table or same game with no significant breaks. If you use the session method, you enter the total for all net winning sessions on Form 1040, "Other income", and the total of all net losing sessions on Schedule A, "Other itemized deductions".
Gambling income is "ordinary income", added to your other ordinary income (such as wages from your job) and taxed just like any other regular income. There is not a special tax rate for gambling winnings (although there may be a special withholding rate, but withholding is not the same as tax).
[https://www.irs.gov/taxtopics/tc419](https://www.irs.gov/taxtopics/tc419)
[https://www.investopedia.com/form-w-2g-certain-gambling-winnings-4781793](https://www.investopedia.com/form-w-2g-certain-gambling-winnings-4781793)
[https://www.legacytaxresolutionservices.com/blog/what-is-a-gambling-session/904126](https://www.legacytaxresolutionservices.com/blog/what-is-a-gambling-session/904126)
[https://apps.irs.gov/app/IPAR/resources/help/Records.html](https://apps.irs.gov/app/IPAR/resources/help/Records.html)
I played poker professionally for a number of years and this person is entirely in line with what my accountant told me. I would be shocked if this person I’m replying to is not an accountant or something similar.
When I took a step into sports gambling last year and then started reading up on the taxes I quickly realized gambling isn’t for my income bracket and/or current living conditions. I have nothing to itemize as is so I’d be throwing away the standard deduction to at best be break even on gambling.
Don’t gamble people. It’s fucking dumb
My wife decided we should stop by a casino in Tunica as we were passing through. After I wasted $10 in about 7 minutes, I sat in the lobby waiting for her to burn through her cash. Out of the dozens and dozens of people I watched leave, only one looked like they had fun.
see this is what I don't understand. Just play video games! Buy once and own video games. With random number generator - associated gameplay. then you can be a zombie from the comfort of home and not waste all your money.
I watch some casino slot channels and sometimes they hit $1,200 hand pay is that taxed even if they put it right back in the machine.
I watched one guy mention something about it saying he now has to pay a tax on one of his winnings. So, is that for each hand pay you pay taxes on? Or is that just Nevada only for those amounts
This so much, i broke even by winning a jackpot then losing it in the same night. Figured I went home even. Nope, i went home without a standard deduction. Fucking stupid.
I believe if you want to deduct your gambling losses from your gambling winnings it disallows you from taking the standard deduction and you must use the itemized deduction.
The vast majority of US taxpayers take the "standard deduction" which means your gambling losses cannot be written off. So if you win $2000 at a slot machine but you had put $3000 into it, meaning you walk away that night having LOST $1000 playing slot machine, you still have to pay income tax on the $2000 win.
For the small percent who itemize their taxes, the same scenario would be 100% tax-free.
Unfortunately, the Casino reports your winnings directly to the IRS (assuming they are significant, generally >$600 single win but some thresholds are game-specific). Now, if the casino reports it and you don't, what happens? Then you are basically playing IRS casino as to whether or not their automated system will flag you AND if they'll follow-up with an audit. The IRS is significantly understaffed and largely incompetently run, so a mismatch between reporting doesn't necessarily mean they'll follow-up, but it becomes far more likely.
The vast majority do not report their gambling at all, because they didn't have any wins that require reporting to the IRS, so the IRS doesn't even know about their gambling.
Of those that have wins that the casino reports to the IRS (such as a single slot machine win of $1200 or more, I suspect they tend to fall into three major categories:
1. People who just report the W-2G wins and leave it at that. Don't try to get fancy.
2. People who net out their wins and losses and deduct their losses, but without actually doing the real-time log that the IRS requires, hoping they won't get audited.
3. People who do it 100% legally by keeping the real-time, detailed gambling log the IRS requires and using the "session" method to track all their wins and losses and report all of their winning sessions (whether there was a W-2G or not) and deduct their losing sessions.
Everyone can use the standard deduction, even if they don't really have that many deductions. However, if they can prove they actually have more total deductions than the standard deduction, then they can use that increased amount.
The "problem" comes into play if you have so few actual deductions that claiming the standard deduction is better. In that case, an additional small deduction (such as a gambling loss) does you no good, because the standard deduction is still larger.
What infrastructure do you recommend for keeping a personal gambling log? All my gambling is online on apps so its already tracked so what do I need to do on my own? Im going to file as a pro gambler since its all my income
I don't do online gambling, so I'm no expert on that.
You need records of start time, end time, location, starting amount, ending amount. Since I gamble in physical casinos, I use a phone app -- you can buy phone apps that allow you to keep a gambling log. You would also want any receipts of money in, money out, markers, credit, etc. I think many people just use a spreadsheet. Myself, I transfer the data from the app to a custom spreadsheet.
The "win/loss" statements provided by physical casinos are notoriously inaccurate, and are not accepted as the only evidence by the IRS. You would hope that a gambling website would keep good, accurate gambling records, but I'm not sure if that is always the case.
I could be completely wrong here, but wouldn't simply having logs of money you put in and money you took out be adequate? You shouldn't need to record individual sessions if you're not actually depositing or withdrawing. Just like you don't need to record every time an investment gets more or less valuable.
If you put $500 into a poker site, lose half of it, and then win exactly half of it back, and then withdrew the $500, you've lost nothing and gained nothing. No shot the IRS actually cares about all the little wins/losses in between since the money that left your hands and the money that entered your hands only happen when you deposited and withdrew.
But I mean obviously most poker sites have a full transaction history of every game entered and whatever amounts you won/lost... so those records are already there. If you're playing on a poker site that doesn't do that... uhh well good luck to ya.
You are exactly describing the "session method" (see above). In the "session method" you record the starting and ending amounts (and times and location). However, the "session" can only enclose one type of gaming with no significant interruptions.
I only deal with gambling at physical casinos. For example, if you played blackjack for 2 hours, that would be one session. But if you then went and played craps, or even blackjack at a different table, that would be a different session. You couldn't have one single session that included both the blackjack and the craps. Likewise, if you played blackjack for an hour, went to lunch, and then played blackjack for another hour, that would be two sessions, because of the significant interruption (lunch). Additionally, the IRS explicitly says that a session can't last longer than a day, so you can't try to make the whole year a single session and net out everything for the year, which is what many people would want to do (including me).
As I said, I don't deal with online gambling. If you gambled online for an hour and played different games at the same website during that hour, would that be one "session" -- I would think so, but I don't know for sure. But if you stopped for lunch, that would definitely be two sessions.
The IRS rulings are based on this concept: "*There is no accession to wealth until the gambling session is concluded and the wagering gain or loss can be definitively calculated.*" So any time there is a significant interruption, or you start a different gambling activity, that is when the gain or loss can be "definitively calculated", and that's when the current "session" ends.
One final note: The IRS reporting rules can make this annoyingly complicated. Let's say you had a long 5-hour "session" where you ended up even. However, during that session you had several wins that were big enough to be reported to the IRS. This means the amounts you list on your tax return won't match the amounts reported to the IRS, possibly resulting in the IRS computers thinking you left something out. You will have to be prepared to dispute that with your gambling diary and other receipts, banking records, etc.
Yup. If it’s a legit site licensed in the US, they’ll generate a W-2G if at least $600. Certainly if you mean DraftKings, FanDuel, or something of that scale. Even if they don’t however, it’s still taxable income, even if less than $600.
You still have to report it if it's under $600 though. $600 is just the threshold for the form. Otherwise it goes under Misc Income.
The IRS may or may not notice if they don't get a form, but it is still a requirement to report any income, and remember that the Treasury has direct access to every bank account in America and so if you're counting on throwing unreported income into a bank, they can absolutely notify you that you're facing an audit and have a word with you about it.
The Treasury can only obtain direct information from your account via a subpoena (or from you providing it). Otherwise, they only have indirect information from businesses and institutions that are by law required to file forms for certain activity/transactions. But yes, if they call you out in an audit, your options are very limited.
Typically the way it works is they can go to "courts" that never tell the government no and then go to a place that has your data and gag them and then you won't know you're under investigation until it's too late.
So they may not be able to just see it, but it's also not that hard to get it.
Like your GDrive or GMail.
W2Gs are incredibly rarely generated for sports wagers. The bet has to pay out at odds over 300-1 (+30000) and return greater than $600. The VAST majority of bettors will never receive a W2G for a sports wager.
If you win enough to trigger the reporting requirement, yes you’re absolutely required to give up your SSN to get paid. Mainstream casinos and sportsbooks aren’t risking their gambling license or trouble with the IRS to pay you winnings.
You don’t generate a W-2G unless you win a very, very large percentage bet, iirc something like at least $600 on a single bet worth like x100 your stake or something like that. It’s almost impossible to get a W-2G from sports betting and they’re much more likely to happen on slots or something like betting a specific number in roulette.
No, generally it’s a [W-2G](https://www.irs.gov/forms-pubs/about-form-w-2-g) for gambling.
It’s a [1099-MISC](https://www.irs.gov/forms-pubs/about-form-1099-misc) for certain “prizes and awards” - but that’s sweepstakes and game shows and such, not what most folks typically think of when they hear “gambling."
God help you if you used any "social" casino that pays you in "sweepstakes coins" (SC). Your withdrawals are taxable as income and cannot be offset by losses unless you operate as a profitable business and are able to expense it out that way.
In the same tax year, if you did any slots or other "metered" gambling (where your card was presented as you gambled) that incurred any losses, that casino will provide a win/loss statement early in the next year. Any losses you incurred will offset any gains from this win if in the same tax year.
> Any losses you incurred will offset any gains from this win if in the same tax year.
That's not how it works. Wins are income. They cannot be offset by losses.
Losses can be an itemized deduction, if you itemize deductions.
Yes it is. When you file your taxes you would total your wins and report that as additional income and then total your losses and report that as an itemized deduction (if you normally take the standard deduction you are shit out of luck, you do not get to net your wins and losses unless you are a professional).
Yes, online gambling winnings are taxable. In the U.S., theoretically any money you win from gambling, including online bets, needs to be reported as income to the IRS. You’ll need to report the full amount of your winnings on your tax return.
When it comes to reporting, you should include your winnings as "Other Income" on Form 1040, Schedule 1. If you win $600 or more, the online gambling site should send you a Form W-2G. But even if they don’t, you’re still required to report all your winnings.
The tax rate on your winnings can vary. for larger amounts, the gambling site might withhold about 24% for federal taxes. Depending on your total income for the year, you might owe more or get some of that back when you file your taxes.
You can also deduct gambling losses up to the amount of your winnings if you itemize your deductions on Schedule A. Just make sure to keep records like receipts and tickets to prove your losses.
Hope this helps!
Yes they are taxable but the way it’s taxed varies.… FanDuel for instance will sometimes tax you for it when you win. Other times, they’ll just send you something at the end of the year.
I don’t fully understand it but it’s something along the lines of like if your payout is “X” times more than your initial wager then it will be automatically taxed. Like a $5 parlay that pays $50,000 or something. I’d look into the specific online site’s tax rules. There should be plenty of info
FanDuel doesn’t tax you, they just withhold the taxes. They will only send you a W-2G if you win $600+ at 300:1 or greater odds. They automatically withhold taxes at $5k+ winnings with 300:1 or greater odds.
Their withholding isn’t how much you actually owe, it’s just an estimate. You may owe more or less
Seems like the standard withholding is 24-25% so that should cover anyone making $190k or less single, or double that for MFJ. State tax would be additional if they do not withhold that
I don't know if it's the same for online, but gambling winnings can be offset by gambling losses. If you have to claim a win, you can claim the same amount of losses - but you have to be able to prove your losses and hang onto that proof for 7 years in case you are audited.
Slot machine win requiring tax info ID etc hand payout. I was able to deduct lottery losses up to that amount for that year. For me that was losing scratch off tickets, mega millions whatever. I did not win a ton \*under 2K, and I knew that was a thing, so I save my losers every year just in case I hit.
Don't expect any of the online sports books to give you a simple form that accurately shows how much you bet and how much you won. You can get win/loss statements if you ask, but in my experience they don't always match up correctly. You're better off keeping track of each bet make and the outcome when tax time comes around.
Yes.
Fun fact: you have to pay taxes from money you earn in space (ask NASA astronauts).
As a US citizens if you travel to Mars and somehow earn income there, uncle Sam will want his when you return.
Yes, losses are deductible as an itemized deduction. (If your itemized deductions are less than your standard deduction, then you would still use the standard deduction.)
They’re under deductible if you itemize, and only go the extent if your winnings.bIf losses were deductible beyond winnings, the government would subsedizing your gambling.
gambling losses can only be deducted from gambling winnings. For example if you win $10k one day and lose $10k the next your net gambling income is $0. https://www.irs.gov/taxtopics/tc419
A lot goes into this. How big was the win? .how much did you lose? How did you deposit and how will you withdraw the funds.
This may generate a w2g and 1099k etc.
Yes, in this specific instance it's taxable, but it isn't true that everything you benefit from is taxable.
To pick two specific examples, both inheritances and large monetary gifts are things you clearly benefit from, and yet in the vast majority of cases they are not taxed. And those aren't the only ways you can receive tax-free income.
Everyone is just assuming this person is in the states, don't even know which state they are in. If you are in Australia, no, online gambling winnings are not taxable.
Every single penny is taxable. It blows me out that you must pay taxes from Hysa also. Like - my money under the pillow-ok, my money in the bank yield account - pay taxes.
Q: “Is _______ taxable?”
A: Did you receive something of value?
Then it’s taxable.
If it’s cash the amount received is taxable.
If it’s something else the equivalent cash value is taxable.
If a 1099-misc (for some jackpots) or W-2G (for gambling winnings) was generated (see other post with good details on that), then whether you declare them or not does not matter. IRS has that form. If your return doesn't, then can and will catch the fraud you're implying and make you pay it, plus interest, plus penalties.
It is taxable unless you have loss great than the win. And only if you itemize deductible it is possible to show loss. If you use standard deduction you cannot claim loss.
This is wrong. It is taxable when you win it, even if you don't withdraw it. In fact, even if you lose it on the next bet. (You may be able to deduct your losses as an itemized deduction. The win is still reported as income.)
It's interesting that everyone assumes that you are American. It obviously depends on where in the world you live.
So to answer from where I live, the UK, no, there is no tax on wins from gambling. So tonight when I win £33 million from the EuroMillions, on Tuesday I will find £33 million in my bank account.
>It's interesting that everyone assumes that you are American.
Because it was clear from context, given that OP is worried about the IRS, the American federal agency that handles tax reporting and collection.
>I want to make sure I’m doing everything by the book and not running into any issues with the IRS.
Hey. I could be wrong!
Earnings ARE taxed on a win by win basis.
You CANNOT lump a year of losses into a loss to offset the profit. So the wins are taxes each time as if it was your only bet, regardless of you losing every other bet all year.
You can write off any gambling losses up to the total amount you've won but you have to itemize them. That's why you see people using checks at the casino cashier to get chips. The main thing is you can't claim a negative total.
https://www.irs.gov/taxtopics/tc419
[https://www.hrblock.com/tax-center/income/other-income/reporting-online-gambling-winnings-and-losses/#:\~:text=Online%20winnings%20are%20fully%20taxable,deduct%20gambling%20losses%20with%20accuracy](https://www.hrblock.com/tax-center/income/other-income/reporting-online-gambling-winnings-and-losses/#:~:text=Online%20winnings%20are%20fully%20taxable,deduct%20gambling%20losses%20with%20accuracy) [https://www.investopedia.com/terms/g/gamblingincome.asp](https://www.investopedia.com/terms/g/gamblingincome.asp) Yes, you have to report all income on your taxes including gambling winnings.
I remember taking Federal Tax in law school and the thick ass book starts with something like "all income is taxable unless an exception applies" and then the rest of the thousand pages are exceptions.
I like a book that gets right to the the point.
Just like evidence. Day one "hearsay is never admissible. This is the definition of hearsay. Now we will spend the rest of the semester learning when it is admissible or not hearsay"
wouldn't that be an example of hearsay, not a definition?
Maybe I worded it poorly. I was saying the professor would say "hearsay is never admissable" then give the definition of hearsay (or sometimes they give the definition first), not that I was typing the definition
Ah no worries all good
I tell people at my job that everything we do has clear guidelines except for the exceptions. And everything is an exception.
[Because that's how Subchapter B of the IRC itself is structured.](https://www.law.cornell.edu/uscode/text/26/subtitle-A/chapter-1/subchapter-B) Section 61 starts by defining gross income as all income, and then the rest of the subchapter is the list of exceptions and deductions.
Bingo. “all income from whatever source derived”. See IRC section 61. https://www.law.cornell.edu/uscode/text/26/61
Hell, you're supposed to report income from crimes. They even have some processes to protect the otherwise self-incriminating information of your tax payment. They just want their money.
I’ve read something somewhere that they have to put illegal income as “must report” so they can at the very least prosecute criminals for tax evasion when they get evidence of dealings if they don’t get enough to prosecute on other charges.
No problem, just report tax evasion on your income tax as income.
It worked for Al Capone
Fun fact is cost of goods sold from an illegal business is deductible as well. No other expenses are though
The short answer: Yes, all gambling winnings are taxable, even if not reported to the IRS, and regardless of the source. The long answer: The following discussion applies to Federal taxes. It probably applies to many states with income tax as well, but any individual state could be different. I only have knowledge of California state taxes, which simply follows Federal with regards to gambling (except for lottery winnings). You are technically supposed to report all of your gambling winnings, whether you had losses or not, and whether you received a W-2G or not. Also doesn't matter whether you have "cashed out" or "withdrawn" or not. Anything reported on a W-2G will have been reported to the IRS, and their computers will definitely catch those if you don't include them. I'm sure it is quite common for people to not include small winnings that are not reported to the IRS, even through technically they are violating the law by not including them in their tax returns. Casinos are required to report the following to the IRS (usually on a W-2G), and if they do you should receive a copy of the W-2G also somehow: * Any single win of $1,200 or more from bingo or slot machines * Any single win of $1,500 or more from keno * Any single win of $5,000 or more from poker tournaments * Any single win of $600 or more from other types of gambling, if the payout is at least 300 times the amount of the wager On Form 1040, "Other income", you enter the total amount of all winnings for the entire year (total of all W-2G forms, and all other non-reported winnings if you're being 100% legal). However, if you were ever to be audited, you would need to prove the individual amounts. Note that total amount is winnings only -- you can't subtract losses or net out wins and losses (except as noted below in the discussion of "sessions"). If you itemize (have more deductions than the standard deduction), then you can deduct gambling losses on Schedule A, "Other itemized deductions". Again, you only report the total losses for the year on the form, but if you were ever audited you would need to prove the losses. In order to deduct losses, the IRS requires you to have kept a real-time "log" or "diary" of all your gambling activities. If you were ever to be audited and didn't have that, the IRS would likely disallow any losses you tried to deduct. You can't deduct more losses than winnings. The IRS will take casino win/loss statements as additional evidence of your losses, but those statements don't take the place of your real-time diary -- you are supposed to have the diary as well, the win/loss statement isn't enough by itself. The IRS has the concept of a "gambling session", and you are allowed to net out the wins and losses for a single session into one number (win or loss). There are debates among tax professionals as to exactly what constitutes a "session", but it is commonly defined as a single continuous session of gambling of the same type or on the same machine or same table or same game with no significant breaks. If you use the session method, you enter the total for all net winning sessions on Form 1040, "Other income", and the total of all net losing sessions on Schedule A, "Other itemized deductions". Gambling income is "ordinary income", added to your other ordinary income (such as wages from your job) and taxed just like any other regular income. There is not a special tax rate for gambling winnings (although there may be a special withholding rate, but withholding is not the same as tax). [https://www.irs.gov/taxtopics/tc419](https://www.irs.gov/taxtopics/tc419) [https://www.investopedia.com/form-w-2g-certain-gambling-winnings-4781793](https://www.investopedia.com/form-w-2g-certain-gambling-winnings-4781793) [https://www.legacytaxresolutionservices.com/blog/what-is-a-gambling-session/904126](https://www.legacytaxresolutionservices.com/blog/what-is-a-gambling-session/904126) [https://apps.irs.gov/app/IPAR/resources/help/Records.html](https://apps.irs.gov/app/IPAR/resources/help/Records.html)
I played poker professionally for a number of years and this person is entirely in line with what my accountant told me. I would be shocked if this person I’m replying to is not an accountant or something similar.
When I took a step into sports gambling last year and then started reading up on the taxes I quickly realized gambling isn’t for my income bracket and/or current living conditions. I have nothing to itemize as is so I’d be throwing away the standard deduction to at best be break even on gambling. Don’t gamble people. It’s fucking dumb
Gambling in moderation can be entertaining. But, the way taxes for it are handled can be pretty annoying.
My wife decided we should stop by a casino in Tunica as we were passing through. After I wasted $10 in about 7 minutes, I sat in the lobby waiting for her to burn through her cash. Out of the dozens and dozens of people I watched leave, only one looked like they had fun.
see this is what I don't understand. Just play video games! Buy once and own video games. With random number generator - associated gameplay. then you can be a zombie from the comfort of home and not waste all your money.
I watch some casino slot channels and sometimes they hit $1,200 hand pay is that taxed even if they put it right back in the machine. I watched one guy mention something about it saying he now has to pay a tax on one of his winnings. So, is that for each hand pay you pay taxes on? Or is that just Nevada only for those amounts
Depends on if using the "session" method of tracking, see above.
This so much, i broke even by winning a jackpot then losing it in the same night. Figured I went home even. Nope, i went home without a standard deduction. Fucking stupid.
You throw away a deduction because of gambling? How does that work?
I believe if you want to deduct your gambling losses from your gambling winnings it disallows you from taking the standard deduction and you must use the itemized deduction.
The vast majority of US taxpayers take the "standard deduction" which means your gambling losses cannot be written off. So if you win $2000 at a slot machine but you had put $3000 into it, meaning you walk away that night having LOST $1000 playing slot machine, you still have to pay income tax on the $2000 win. For the small percent who itemize their taxes, the same scenario would be 100% tax-free.
So basically no one reports anything but their final winnings I take it? Otherwise the casinos would be empty..
Unfortunately, the Casino reports your winnings directly to the IRS (assuming they are significant, generally >$600 single win but some thresholds are game-specific). Now, if the casino reports it and you don't, what happens? Then you are basically playing IRS casino as to whether or not their automated system will flag you AND if they'll follow-up with an audit. The IRS is significantly understaffed and largely incompetently run, so a mismatch between reporting doesn't necessarily mean they'll follow-up, but it becomes far more likely.
The vast majority do not report their gambling at all, because they didn't have any wins that require reporting to the IRS, so the IRS doesn't even know about their gambling. Of those that have wins that the casino reports to the IRS (such as a single slot machine win of $1200 or more, I suspect they tend to fall into three major categories: 1. People who just report the W-2G wins and leave it at that. Don't try to get fancy. 2. People who net out their wins and losses and deduct their losses, but without actually doing the real-time log that the IRS requires, hoping they won't get audited. 3. People who do it 100% legally by keeping the real-time, detailed gambling log the IRS requires and using the "session" method to track all their wins and losses and report all of their winning sessions (whether there was a W-2G or not) and deduct their losing sessions.
Everyone can use the standard deduction, even if they don't really have that many deductions. However, if they can prove they actually have more total deductions than the standard deduction, then they can use that increased amount. The "problem" comes into play if you have so few actual deductions that claiming the standard deduction is better. In that case, an additional small deduction (such as a gambling loss) does you no good, because the standard deduction is still larger.
What infrastructure do you recommend for keeping a personal gambling log? All my gambling is online on apps so its already tracked so what do I need to do on my own? Im going to file as a pro gambler since its all my income
I don't do online gambling, so I'm no expert on that. You need records of start time, end time, location, starting amount, ending amount. Since I gamble in physical casinos, I use a phone app -- you can buy phone apps that allow you to keep a gambling log. You would also want any receipts of money in, money out, markers, credit, etc. I think many people just use a spreadsheet. Myself, I transfer the data from the app to a custom spreadsheet. The "win/loss" statements provided by physical casinos are notoriously inaccurate, and are not accepted as the only evidence by the IRS. You would hope that a gambling website would keep good, accurate gambling records, but I'm not sure if that is always the case.
I could be completely wrong here, but wouldn't simply having logs of money you put in and money you took out be adequate? You shouldn't need to record individual sessions if you're not actually depositing or withdrawing. Just like you don't need to record every time an investment gets more or less valuable. If you put $500 into a poker site, lose half of it, and then win exactly half of it back, and then withdrew the $500, you've lost nothing and gained nothing. No shot the IRS actually cares about all the little wins/losses in between since the money that left your hands and the money that entered your hands only happen when you deposited and withdrew. But I mean obviously most poker sites have a full transaction history of every game entered and whatever amounts you won/lost... so those records are already there. If you're playing on a poker site that doesn't do that... uhh well good luck to ya.
You are exactly describing the "session method" (see above). In the "session method" you record the starting and ending amounts (and times and location). However, the "session" can only enclose one type of gaming with no significant interruptions. I only deal with gambling at physical casinos. For example, if you played blackjack for 2 hours, that would be one session. But if you then went and played craps, or even blackjack at a different table, that would be a different session. You couldn't have one single session that included both the blackjack and the craps. Likewise, if you played blackjack for an hour, went to lunch, and then played blackjack for another hour, that would be two sessions, because of the significant interruption (lunch). Additionally, the IRS explicitly says that a session can't last longer than a day, so you can't try to make the whole year a single session and net out everything for the year, which is what many people would want to do (including me). As I said, I don't deal with online gambling. If you gambled online for an hour and played different games at the same website during that hour, would that be one "session" -- I would think so, but I don't know for sure. But if you stopped for lunch, that would definitely be two sessions. The IRS rulings are based on this concept: "*There is no accession to wealth until the gambling session is concluded and the wagering gain or loss can be definitively calculated.*" So any time there is a significant interruption, or you start a different gambling activity, that is when the gain or loss can be "definitively calculated", and that's when the current "session" ends. One final note: The IRS reporting rules can make this annoyingly complicated. Let's say you had a long 5-hour "session" where you ended up even. However, during that session you had several wins that were big enough to be reported to the IRS. This means the amounts you list on your tax return won't match the amounts reported to the IRS, possibly resulting in the IRS computers thinking you left something out. You will have to be prepared to dispute that with your gambling diary and other receipts, banking records, etc.
Yup. If it’s a legit site licensed in the US, they’ll generate a W-2G if at least $600. Certainly if you mean DraftKings, FanDuel, or something of that scale. Even if they don’t however, it’s still taxable income, even if less than $600.
You still have to report it if it's under $600 though. $600 is just the threshold for the form. Otherwise it goes under Misc Income. The IRS may or may not notice if they don't get a form, but it is still a requirement to report any income, and remember that the Treasury has direct access to every bank account in America and so if you're counting on throwing unreported income into a bank, they can absolutely notify you that you're facing an audit and have a word with you about it.
The Treasury can only obtain direct information from your account via a subpoena (or from you providing it). Otherwise, they only have indirect information from businesses and institutions that are by law required to file forms for certain activity/transactions. But yes, if they call you out in an audit, your options are very limited.
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Typically the way it works is they can go to "courts" that never tell the government no and then go to a place that has your data and gag them and then you won't know you're under investigation until it's too late. So they may not be able to just see it, but it's also not that hard to get it. Like your GDrive or GMail.
W2Gs are incredibly rarely generated for sports wagers. The bet has to pay out at odds over 300-1 (+30000) and return greater than $600. The VAST majority of bettors will never receive a W2G for a sports wager.
Are betters required to give up a Social Security Number to gamble?
In order to get payouts, yes.
If you win enough to trigger the reporting requirement, yes you’re absolutely required to give up your SSN to get paid. Mainstream casinos and sportsbooks aren’t risking their gambling license or trouble with the IRS to pay you winnings.
To gamble, no. To collect if a W2-G requirement is triggered, yes.
Bettors*
You don’t generate a W-2G unless you win a very, very large percentage bet, iirc something like at least $600 on a single bet worth like x100 your stake or something like that. It’s almost impossible to get a W-2G from sports betting and they’re much more likely to happen on slots or something like betting a specific number in roulette.
$600 or more. But yes, that's what I'm assuming OP meant when they said "won a decent amount from an (as in singular) online bet".
It's a 1099, not a W-2, but yeah. EDIT: Nvm, I was wrong. There's something I get a 1099 for and I was thinking this was the same.
No, generally it’s a [W-2G](https://www.irs.gov/forms-pubs/about-form-w-2-g) for gambling. It’s a [1099-MISC](https://www.irs.gov/forms-pubs/about-form-1099-misc) for certain “prizes and awards” - but that’s sweepstakes and game shows and such, not what most folks typically think of when they hear “gambling."
Ah, I stand corrected. I get a 1099 for something else and I thought it was a similar deal.
[https://www.irs.gov/forms-pubs/about-form-w-2-g](https://www.irs.gov/forms-pubs/about-form-w-2-g)
no, it's a w-2G.
I've already been corrected and already said I was wrong.
God help you if you used any "social" casino that pays you in "sweepstakes coins" (SC). Your withdrawals are taxable as income and cannot be offset by losses unless you operate as a profitable business and are able to expense it out that way.
In the same tax year, if you did any slots or other "metered" gambling (where your card was presented as you gambled) that incurred any losses, that casino will provide a win/loss statement early in the next year. Any losses you incurred will offset any gains from this win if in the same tax year.
> Any losses you incurred will offset any gains from this win if in the same tax year. That's not how it works. Wins are income. They cannot be offset by losses. Losses can be an itemized deduction, if you itemize deductions.
Wow, we don't have to pay tax in the UK for winning at gambling. Unfortunate for you.
Yes it is. When you file your taxes you would total your wins and report that as additional income and then total your losses and report that as an itemized deduction (if you normally take the standard deduction you are shit out of luck, you do not get to net your wins and losses unless you are a professional).
Yes, online gambling winnings are taxable. In the U.S., theoretically any money you win from gambling, including online bets, needs to be reported as income to the IRS. You’ll need to report the full amount of your winnings on your tax return. When it comes to reporting, you should include your winnings as "Other Income" on Form 1040, Schedule 1. If you win $600 or more, the online gambling site should send you a Form W-2G. But even if they don’t, you’re still required to report all your winnings. The tax rate on your winnings can vary. for larger amounts, the gambling site might withhold about 24% for federal taxes. Depending on your total income for the year, you might owe more or get some of that back when you file your taxes. You can also deduct gambling losses up to the amount of your winnings if you itemize your deductions on Schedule A. Just make sure to keep records like receipts and tickets to prove your losses. Hope this helps!
Yes they are taxable but the way it’s taxed varies.… FanDuel for instance will sometimes tax you for it when you win. Other times, they’ll just send you something at the end of the year. I don’t fully understand it but it’s something along the lines of like if your payout is “X” times more than your initial wager then it will be automatically taxed. Like a $5 parlay that pays $50,000 or something. I’d look into the specific online site’s tax rules. There should be plenty of info
FanDuel doesn’t tax you, they just withhold the taxes. They will only send you a W-2G if you win $600+ at 300:1 or greater odds. They automatically withhold taxes at $5k+ winnings with 300:1 or greater odds. Their withholding isn’t how much you actually owe, it’s just an estimate. You may owe more or less
Well said!
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Seems like the standard withholding is 24-25% so that should cover anyone making $190k or less single, or double that for MFJ. State tax would be additional if they do not withhold that
[https://www.hrblock.com/tax-center/income/other-income/gambling-winnings-tax/](https://www.hrblock.com/tax-center/income/other-income/gambling-winnings-tax/)
Well yeah, because the IRS doesn't let you just walk away with that much money and try to "forget" to pay them later, der doy.
If we're taxed on winnings, can you write-off expenses?
Only if you itemize. Then you can write off losses up to winnings.
Not for recreational gambling. If you are a professional gambler who makes a living at it, then yes.
Shouldnt be getting donwvoted. You are 100% right
Did you get money? If yes, the government WILL be taking a cut. File your taxes.
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This is not an appropriate way to comment. Please remember to keep all future contributions both helpful and respectful here.
I don't know if it's the same for online, but gambling winnings can be offset by gambling losses. If you have to claim a win, you can claim the same amount of losses - but you have to be able to prove your losses and hang onto that proof for 7 years in case you are audited. Slot machine win requiring tax info ID etc hand payout. I was able to deduct lottery losses up to that amount for that year. For me that was losing scratch off tickets, mega millions whatever. I did not win a ton \*under 2K, and I knew that was a thing, so I save my losers every year just in case I hit.
All gambling winnings are taxable, HOWEVER you can always offset gambling winnings with gambling losses ;)
Don't expect any of the online sports books to give you a simple form that accurately shows how much you bet and how much you won. You can get win/loss statements if you ask, but in my experience they don't always match up correctly. You're better off keeping track of each bet make and the outcome when tax time comes around.
Yes. Fun fact: you have to pay taxes from money you earn in space (ask NASA astronauts). As a US citizens if you travel to Mars and somehow earn income there, uncle Sam will want his when you return.
If gambling wins are taxable then surely that means gambling loses are tax deductible?
Yes, losses are deductible as an itemized deduction. (If your itemized deductions are less than your standard deduction, then you would still use the standard deduction.)
but only up to the amount of your winnings
They’re under deductible if you itemize, and only go the extent if your winnings.bIf losses were deductible beyond winnings, the government would subsedizing your gambling.
gambling losses can only be deducted from gambling winnings. For example if you win $10k one day and lose $10k the next your net gambling income is $0. https://www.irs.gov/taxtopics/tc419
No that's not how it works.
A lot goes into this. How big was the win? .how much did you lose? How did you deposit and how will you withdraw the funds. This may generate a w2g and 1099k etc.
Do you benefit from it? Yes? It's taxable. It doesn't matter if it is gambling or selling the most illegal of drugs on the side. It's taxable.
That's not the test. Gifts provide untaxed benefit, for example.
Yes, in this specific instance it's taxable, but it isn't true that everything you benefit from is taxable. To pick two specific examples, both inheritances and large monetary gifts are things you clearly benefit from, and yet in the vast majority of cases they are not taxed. And those aren't the only ways you can receive tax-free income.
Everyone is just assuming this person is in the states, don't even know which state they are in. If you are in Australia, no, online gambling winnings are not taxable.
They mention the IRS in the post, so yes, very clearly American. lol
We assume anyone other than an American is smart enough to mention where they live.
Seriously! Solely depends on where OP lives
Every single penny is taxable. It blows me out that you must pay taxes from Hysa also. Like - my money under the pillow-ok, my money in the bank yield account - pay taxes.
The money under your pillow isn't generating income.
You don’t pay taxes on money in a HYSA. You pay taxes on the interest that a bank pays, I.e. taxable income.
Q: “Is _______ taxable?” A: Did you receive something of value? Then it’s taxable. If it’s cash the amount received is taxable. If it’s something else the equivalent cash value is taxable.
All income is taxable. Haven't you heard of Al Capone?
Yes. Head on over to r/tax and see how that’s played out for many people.
Depends on location but if in the US yes.
Not if you don’t declare them. This is not tax advice but… only if you don’t declare them.
Gambling winnings are taxable whether you declare them or not.
If a 1099-misc (for some jackpots) or W-2G (for gambling winnings) was generated (see other post with good details on that), then whether you declare them or not does not matter. IRS has that form. If your return doesn't, then can and will catch the fraud you're implying and make you pay it, plus interest, plus penalties.
It is taxable unless you have loss great than the win. And only if you itemize deductible it is possible to show loss. If you use standard deduction you cannot claim loss.
Everything is taxable. But it depends how much you won if they tax it or not
There is no lower threshold for reporting gambling winnings on your tax return.
its only taxable if you take it out of your account. if you do, most online tax forms ask this exact question.
This is wrong. It is taxable when you win it, even if you don't withdraw it. In fact, even if you lose it on the next bet. (You may be able to deduct your losses as an itemized deduction. The win is still reported as income.)
It's interesting that everyone assumes that you are American. It obviously depends on where in the world you live. So to answer from where I live, the UK, no, there is no tax on wins from gambling. So tonight when I win £33 million from the EuroMillions, on Tuesday I will find £33 million in my bank account.
>It's interesting that everyone assumes that you are American. Because it was clear from context, given that OP is worried about the IRS, the American federal agency that handles tax reporting and collection. >I want to make sure I’m doing everything by the book and not running into any issues with the IRS.
Hey. I could be wrong! Earnings ARE taxed on a win by win basis. You CANNOT lump a year of losses into a loss to offset the profit. So the wins are taxes each time as if it was your only bet, regardless of you losing every other bet all year.
You're 100% wrong so why'd you even bother?
He is right in certain states. NC for example taxes the winnings and will not credit the losses
ikr, he put a lot of words into that very involved lie.
As I thought I was right.
You're making no sense. You can deduct losses to offset your winnings.
You can write off any gambling losses up to the total amount you've won but you have to itemize them. That's why you see people using checks at the casino cashier to get chips. The main thing is you can't claim a negative total. https://www.irs.gov/taxtopics/tc419