How does that work? Do you need to fill out paperwork? How much are you taxed?
2007-09-28 11:27:22 · 11 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Well technically, you have to report and pay tax on all winnings. But here is where it gets tricky:
You only have to pay tax on those winnings that are more than the amount you lost. So if you bet $5000 and won the bet such that you got back 10,000, you had $5000 in winnings. If, over the course of the year you lost more than that 5,000, you actually would report the winnings as income and deduct the loses up to that amount and break even.
Here is where it gets tricky:
1- you need receipts to prove your losses
2 - if your winnings were never over 1200, you did not get a 1099 from the place where you won
3 - if your winnings were over 1200 you should have received a 1099
4 - if you loss more than your winnings - you CANNOT deduct them. You are only allowed to deduct up to the amount that you won.
It is all very confusing and a lot of paperwork. My rule of thumb - if you got a 1099 - make sure you keep track of all losses related to gambling so that you can prove you lost as much as you won. If you did not get a 1099, you are probably better off not reporting - particularly if you know you lost more than you won over the course of the year.
If in doubt about all of this - consult a tax attorney! Best of luck - and glad to here you won the $5,000 - got any tips for this weeks games?
2007-09-28 12:14:10 · answer #1 · answered by pyz01 7 · 1⤊ 1⤋
If you win, you do. The way it works is for any significant amount, over something like $600, of winnings, you'll fill out a form giving them your social security number in order to collect your winnings. You will get a 1099 at the end of the year (a copy will also go to the IRS) and you'll report it on your 1040. Taxes will be due at whatever your tax rate is.
For smaller amounts you are still legally required to report them, but won't get paperwork on them.
If you itemize and have records of the detail specified by the IRS, you can deduct gambling losses up to the amount of your reported gambling winnings for that year.
2007-09-28 14:03:05 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
You bet you do, you are taxed at your normal rate. In other words you add the gambling winnings to you income just like you would if you had another job. When you cashed in your chips you had to give your SSN to the casio. They may have asked you if you wanted tax withheld. At the end of the year they will send you form W2G which you will report on line 21 of form 1040.
If you have gambling losses and a journal stating the date, amount won or lost, and the place; you might be able to itemize deductions and take gambling losses up to gambling winnings.
Don't just subtract the losses from the winnings and report the difference on line 21; if you do you will get a nastygram stating you owe and the penalty and intrest.
PS you must claim all your winnings, not just what you get on a W2G. It would look funny going to an audit with a log that only had losses in it.
2007-09-28 11:39:57 · answer #3 · answered by Charlie & Angie G 4 · 1⤊ 0⤋
Yes you have to report and include ALL winnings Yes a 1099 may be issued to you and IRS NO, withholding is not mandatory for prizes under $5k Big difference between withholding and obligation to report and pay taxes on income If withholding equaled tax liability, there would be NO refunds
2016-04-06 05:51:40 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If you win anything over $600 then the Casino will require you show ID to receive the money and they file a W-2G with the IRS and you have to claim that amount on line 21 of your 1040.
But if you itemize your deductions you may be able to write off your gambling losses up to the amount you won.
2007-09-28 11:37:41 · answer #5 · answered by confair 2 · 1⤊ 0⤋
1
2017-02-14 18:38:34 · answer #6 · answered by Shelton 4 · 0⤊ 0⤋
you only pay taxes on the winnings from a jackpot. every other time if you just win then no you don't fill out any paperwork.
2007-09-28 11:35:19 · answer #7 · answered by Anonymous · 0⤊ 1⤋
yeah when u win big, the casino requires you to fill out a tax form.not sure what the tax is but its pretty hefty.
2007-09-28 11:35:32 · answer #8 · answered by sk8er0114 3 · 0⤊ 0⤋
any time you cash in $600 or more you will get a 1099 for tax purposes
2007-09-28 13:56:08 · answer #9 · answered by Anonymous · 0⤊ 0⤋
That depends on if it was one lump sum. If so yes. If not its best to cash out at different pay windows at different times and cash in less than $2000 at a time
2007-09-28 11:36:35 · answer #10 · answered by ? 2 · 0⤊ 1⤋