So, you have been reading up about placing sports wagers in the US, and are feeling a little lucky? Before you decide to go all out and place your bets you need to know what happens if you do actually win. This article has some key information that will help you to learn how your winnings will be taxed.
You should be aware that no matter what the sport is that you bet on, you will have to pay tax. Racetrack, casino, football, basketball, you name it whatever the season is, you will be taxed on all of your gambling winnings. Sounds awful right? But when you think about it in hind site, its not so awful because technically you will be being taxed on winnings that you wouldn’t have otherwise of had!
Yes rules are boring but we have tried to make them sound as interesting as possible! As mentioned above your winnings, no matter what the sport is are all considered as income by the IRS. If you are betting on the horses and win about 300 times more than your bet, and your jackpot is over the $600 mark, then you will be asked to give your social security number. The company that you place your bet with will send a form to the Internal Revenue Service!
Bingo Slot Machines and Poker?
Again you are subject to reporting your winnings. If you have been playing the slot machines and have hit the jackpot with more than $1,200, or have been playing good old bingo and two fat ladies have come together and had you screaming down the bingo hall winning over $1,200, again you will have to report your earnings to the good old IRS. And if you thought that a game of Keno would be subject to tax free earnings, then you are wrong. Because again if you win over $1,500 at the game you will have to report back to your best buddies at the IRS! Yes, those guys keep on the ball with extra earnings through gambling, there is no escaping them. Poker is the same, play a game with your buddies and grab over $5000, then the sponsor of the game will be reporting your earnings again to the IRS.
More Of Your Winnings Will Be Withheld..
It doesn’t quite end there either, because the US government also request that twenty five percent of your winnings get held by the gambling institution as a federal withholding tax. If you fancy being a diva and withhold your social security number, then the figure shoots up to 28%.
When the tax time of the year comes around, all the winnings that you have reported will have you receiving form W-2G, displaying all the cash that you have won, and the taxes that have been held back from you. If you do not get a form, which reports your winnings you still need to report them all. As well as reporting your gambling earnings you also have to report all of the other prizes that you get too. This also includes lottery earnings! So after all that mumbo jumbo; take a deep breath and read the rest of the jargon, almost done now, promise!
You cannot directly offset the winnings that you have earned from gambling with your losses. You can however, include the losses as miscellaneous deductions when you fill out your tax return. To do this, make sure that you keep a log of all your gambling activities. Keep hold of losing tickets, lottery tickets, and bingo cards. All the legalities aside, and you really should still have a lot of fun gambling! Good luck and fingers and legs crossed.