Gambling winnings?

Question

I won $1600 at a casino and want to know how much I'll have to pay in taxes. Also if anyone knows how claiming your losses works to counter balance the winnings. Thanks

Answer 1

Winning on line 21 of 1040
Losses on line 27 of Schedule A

Your taxes will depend on your tax bracket and filing status. Check with tax table for the amount:
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf#search=%22IRS%20tax%20table%22

Note that 2006 tax rate might be slightly different from last year.

Answer 2

1. did you recieve a W2G? Did you withhold the tax on the W2G?
2. Reporting winnings: The full amount of your gambling winnings for the year must be reported on line 21, Form 1040. You may not use Form 1040A or 1040EZ.

• Deducting losses: If you itemize deductions, you can deduct your gambling losses for the year on line 27, Schedule A (Form 1040). You cannot deduct gambling losses that are more than your winnings.

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.

For more information see IRS Publication 529, Miscellaneous Deductions, or Publication 525, Taxable and Nontaxable Income, both available on the IRS Web site, IRS.gov, or by calling 1-800-TAX-FORM (1-800-829-3676)

As for how much tax you should pay is depending on your total income (AGI) of that year not just your Gambling winning. If you have no change outside of your gambling winning from last year taxes then redo your 2005 return with the gambling winning and loss on the itemized deduction and you will get a close amount of tax due.

Answer 3

The effect your winnings will have on your tax return depends on your tax bracket. If your marginal rate is 25% you will pay $400 in federal income tax on your winnings plus any state income tax if your state has them. As for claiming your losses you may do so on Schedule A if you itemize your deductions. You will need some means of proving that you had losses. If the casino uses some type of player card they will be able to tell you. You can only claim your losses to the extent you had winnings unless you are a professional gambler.

Answer 4

What state did you win the $1600 in?

Some states have been trying to tax non-residents on winning while in their state. CT tried this a couple of years ago at Foxwoods, so check the slip the Casino gave you, if there are withholdings you will have to file a non-resident return in that state and take a credit for taxes paid to other states in your resident state.

Answer 5

Depending on the casino, they may or may not issue you a 1099 for the winnings. Depending on your ethics, without a 1099 it would be difficult for the IRS to find out you wont the money.

Also note that you can only deduct your gambling losses to the extent of your winnings.