|The Eastside Journal tells us that the IRS is aware of more and more gambling opportunities being establishing and so is reminding Americans that ‘they must report all gambling winnings as income on their tax returns.’ In a phrase that captures all such revenue for taxation, the IRS states that ‘gambling income includes -- but is not limited to ...’ the money won from lotteries, horse and dog racing, casino games (including online), and even the money won at raffles, such as for charity. The IRS also gets its share of the ‘fair market value’ (as determined by the IRS) of prizes won, such as cars, houses, vacation trips, and other non-money prizes. |
A win of $600 or more generally requires a gambling winner to file a Form W-2G for taxation. A gambling win of $5,000 or more may mean that payer is required to withhold for the IRS 28%, to be paid as Federal income tax.
And if the winner does not reveal his or her Social Security number, he or she will get 31% of the win withheld by the payer, in wins involving $5,000 or more.
The one bright note is that taxable winners can deduct gambling losses. Save your receipts, tickets, bank statements, and all records of gambling loses -- as well as your winnings.