How Much Will The IRS Take From My Gambling Winnings?
If you’re lucky enough to hit it big at the casino or race track, I’m sure the last thing on your mind is the IRS. Little do people know that the IRS counts gambling winnings as taxable income.
The exact amount that the IRS will take from your gambling winnings depends on a few factors, such as the type of game you are playing, how much you have won, and your tax filing status.
Here is what you need to know.
How much you win makes a difference
The tax rate for gambling winnings varies, depending on the type of game and how much you won.
Slots and bingo generally have a flat 25% tax rate, while lottery winnings are taxed at the highest marginal tax rate in your state. For table games like poker or blackjack, the rate is based on how much you won. Any amount up to $5,000 is taxed at 25%, and amounts over that are taxed at the highest marginal rate.
What about State taxes?
In some states, gambling winnings are fully taxable and must be reported on your state tax return.
For example, while some states such as California do not tax gambling winnings from bingo games or slot machines, they will tax lottery winnings. Additionally, there are other states which have deductions for losses that occur during the same year as the winning ticket was purchased.
To make sure you’re doing things by the book, you should check in with your tax consultant especially if you won big!