Knowing applicable laws for your winnings at a casino may be the difference between big tax payments and/or jail time. All gambling winnings are taxable by the IRS. All winnings from gambling are taxable and are required to be declared on your tax return. Also, all losses from gambling are an itemized deduction (with specific limits depending on your state). For those that are professional gamblers, you are required to file a Schedule C form.
In order to document your taxes, the IRS requires a accurate diary be maintained in order to report gambling losses. The location of the casino as well as the name and address, the names of other people who were present with you as well as the date and type of wager you participated in are all required information for this diary.
A casino must issue you a W2-G to players who have won $600 or more from state lotteries or dog or horse racing. Those who win more then $1,200 at bingo or on a slot machine also will receive this form. For those that win $10,000 or more in one day, the casino is required to report it to the IRS. These cash transaction reports are tracked and verified with your specific tax return, so don’t try to pull one past the IRS. It will result in a variety of large fines and aggravation.
Ultimately, it’s important to know the laws regarding winnings at casinos in your state. Understanding these laws will save you time, money and stress in the long term.