Don’t Let IRS Take your Winnings Away in 2020.
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When students join our Baccarat program they start winning and in most of the cases their profits are more than their losses! Our Students often ask us that “IS CASINO WINNINGS TAXABLE? So, we decided to dedicate this brief Blog Post to educate our current & futures students to UNDERSTAND INCOME TAX ON CASINO WINNINGS!
So, let’s begin…
In Every Casinos, there are winners and losers... Unfortunately, winners can be losers at the end of the financial year if they don't pay their taxes!
Any money you WIN BY WAGERING IS CONSIDERED TAXABLE INCOME by the IRS. CASINO income is not only just card games but also SLOT MACHINES, KENO, POKER TOURNAMENTS, BINGO, SWEEPSTAKES, RAFFLES, BETTING POOLS, GAMESHOWS, HORSE OR DOG RACES, OFF-TRACK BETTING & LOTTERIES.
But the good news is You may be able to deduct Casino losses. Your winnings are generally subject to a flat 25% tax. However, winnings over $5,000 are subject to income tax withholding. Your winnings might be non-cash — like a Car or a vacation. If that’s what the case is then you must include its FMV strands for “fair market value” when figuring out your income.
If you itemize your deductions, you can deduct your CASINO LOSSES FOR THE YEAR ON SCHEDULE A However, you can only deduct your loss up to the amount you report as Casino Winnings. In that case you must maintain 2 Important things… that is…
1) AN ACCURATE DIARY OF YOUR CASINO WINNINGS AND LOSSES.
2) DOCUMENTATION OF YOUR CASINO ACTIVITIES THAT CAN BE VERIFIED BY IRS.
The payer also known as Casino must provide you with a Form W-2G in any of the 5 following conditions…
- $600 OR MORE IF THE AMOUNT IS AT LEAST 300 TIMES THE WAGER
- $1,200 OR MORE IN WINNINGS FROM BINGO OR SLOT MACHINES
- $1,500 OR MORE IN WINNINGS FROM KENO
- MORE THAN $5,000 IN WINNINGS FROM A POKER TOURNAMENT
- ANY WINNINGS SUBJECT TO A FEDERAL INCOME-TAX WITHHOLDING REQUIREMENT
Please Remember: If casino reports your winnings on Form W-2G, federal taxes are withheld at a flat rate of 25%. If you decided not to provide your Tax ID Number to Casino than the withholding is 28%. Withholding is required by IRS when the winnings, minus the bet, are:
- MORE THAN $5,000 or...
- AT LEAST 300 TIMES THE AMOUNT OF THE BET
We hope now you understand INCOME TAX ON CASINO WINNINGS.
PLEASE NOTE: As a student of our program, your all winnings are required to pay taxes! We highly encourage you educate yourself about your Local, State and Federal Government Income Tax Laws or Consult a Registered Accountant to find the Exact Income Tax on Casino Winnings!
AI Bankroll Team