Read How Much Tax Do You Pay on Gambling Winnings
Every citizen needs to pay levies. Players usually get excited about their winnings. Some forget to pay taxes. It is okay to plan how you will spend your earnings. However, pay your levies first. Here is everything you need to know about gambling winning tax:
You Have To Report All Your Revenue
The law requires you to report all your earned cash regardless of the amount. Moreover, this is not a levy on casino wages only. You should report even the cash you had at the office pool. Schedule 1 (form 1040) requires all gambler’s earnings to be reported on the tax return. If you win non-monetary prices, report its fair market value.
You May Get a Form W-2G
This is the information on what amount of gambling revenue is taxable. If your accrued cash is at least $600 with a payout of more than 300 times your wager, you will receive an IRS Form W-2G. The gambling winning tax rate does not have to be 300 times the wager for slot machines and keno winnings. Levies on slot earnings have a threshold of $1200 and $1500 for keno winnings and $5000 for poker tournament revenue accrued. If W-2G is required, the payer will see two identification forms: photo ID and social security number or taxpayer ID number.
Withholding Might Be Required
If you are wondering how much do you get taxed on gambling revenue, here is the answer. Winnings above $5000 on a payout of more than 300 times attracts a withholding tax of 24% of the money accrued. All of the withheld levies will be listed on box 4 of the W-2G form you will receive. After that, you will be required to sign to confirm the statement listed there is correct.
Losses May Be Deductible
Most gamblers do not know what the taxes on gambling winnings are when you lose games. If you are a professional gambler and you can itemize your losses, they may be deductible to get how much tax on gambling revenue to claim.
Report Losses and Winnings Separately
To get the correct value of how much gambling revenue is taxable, winnings and losses are distinguishable on your returns.
Keep Good Records
To know how much tax do you pay on gambling earnings, keep clear records on all your winnings and losses over the year. Include dates, specific wagers, name, address of each casino, and the amount you won or lost.
Paying tax is not a punishment. You need to do it even if you make a small deposit. Feel the pleasure of doing it. It shows loyalty and patriotism.