What is the tax percentage of online gambling winnings?
2007-04-27 10:43:40 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
so what happens if you cash out on a site?
2007-04-27 14:18:44 · update #1
All gambling winnings are treated like any other income, so the percentage depends on your total income.
2007-04-27 10:47:31 · answer #1 · answered by Still reading 6 · 2⤊ 0⤋
On-line gambling being illegal it should be reported on line 21 along with any other illegal income that you may wish to report. You will not be able to take a deduction for any loss or other expense because the earnings were from an illegal activity. If you fail to report this income and the government were to establish that you had earnings from this illegal activity you could be charged with income tax evasion. While the IRS will not seize 100 % of your winnings other government agencies could. If those agencies happen to represent a state taxing agency there is a precedent case which will allow you to take a federal deduction for the amount seized by a state taxing agency.
Sometimes tax law gets a little crazy!!
2007-04-28 15:46:16 · answer #2 · answered by ? 6 · 0⤊ 0⤋
Although gambling winnings are taxable as ordinary income, online gambling is another story. It is currently illegal for Americans to wager on-line. Any winnings CAN be confiscated 100%!
And many on-line gambling sites will no longer transfer funds to US bank accounts for fear of their company officers being arrested on US soil for allowing Americans to gamble on-line. This HAS happened and is a REAL threat.
2007-04-27 10:52:51 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
bostonianinmo's warning left out another reason on-line gambling sites won't accept US customers. It is illegal for US financial institutions to accept funds from or transfer them to on-line gambling sites. Even if the gambling site is not concerned about US law, the bank is.
2007-04-27 13:11:09 · answer #4 · answered by STEVEN F 7 · 0⤊ 0⤋
Gambling winnings are ordinary income, so you'll pay whatever your normal tax bracket is.
(I'm skeptical of the confiscation thing. I'd like to see a real case. I suspect if the IRS were to take ALL of your winnings, it would be applied toward an audit and refunded to you beyond your tax bracket.)
2007-04-27 10:53:00 · answer #5 · answered by Anonymous · 0⤊ 1⤋
The government is against it because gambling is illegal in the US and these online places operate mostly from small island countries in the caribean. Also, this makes it extremely difficult to collect taxes on the winnings.
2016-04-01 10:26:27 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Taxable winnings are treated line salary or interest income. The rate that would apply is simply the marginal tax rate for the bracket that you're in.
2007-04-27 10:47:36 · answer #7 · answered by Tomel 3 · 0⤊ 0⤋