How Much Money Can You Win at a Casino Before You Have to Pay Taxes?

You all know that gamblers can earn big money in a casino, but the story doesn’t end with you withdrawing money just like that. Once you win a certain amount of money, the casino will notify you that they need to check your tax status.

You will have to fulfill certain forms because casino winnings are taxable. But how much money can you win at a casino before you have to pay taxes? The question is a genuine puzzle for most gamblers, so we decided to give you a hand. 

In this post, you will learn when you have (or don’t have) to pay taxes to your casino winnings. 

Tax Benchmarks: Casino winnings 

There are all sorts of casinos out there. From traditional land-based outlets and online platforms to 1 dollar deposit casinos, you can play your favorite games whenever you want. But the same rule applies to all gambling places – you need to report your winnings to the Internal Revenue Service.

Of course, it doesn’t apply to very small amounts. For instance, you don’t have to report a $20 win to the IRS because the amount is not eligible. But what seems to be the threshold here? 

It goes like this – winnings below $600 are not taxable, while everything more than that is. Here is a simple list of tax rules for casino winnings:

• $600 or more: Taxation applies if you win more than $600 betting on horse races and similar betting options. If the winnings exceed 300 times the initial payment, you have to report them. 
• $1,200 or more: This amount is taxable if you win it by playing bingo or slot machines.
• $1,500 or more: This amount is taxable if you win the money by playing keno.
• $5,000 or more: The largest sums are taxable if you participate in a poker tournament. 

This is the general rule of thumb, but you should always check for additional requirements depending on the state you play in. 

Important Tax Tips for Gamblers

You probably don’t think about filing tax reports when playing casino games, but you should learn a few important tricks. We prepared a few tax tips for gamblers that will help you find your way through the annual tax labyrinth. Let’s take a look!

• You Have to Report Everything

When you win, it’s important to remember that you have to report your winnings. First of all, you need to report it to the actual casino – if it’s a traditional land-based outlet. Secondly, you need to file a report to the IRS.

Remember to keep every receipt and voucher that shows you made a deposit or won even if it’s just for $1. It is also very important to keep any additional documents like gambling diaries (a detailed record of the games played). 

If you don’t have a receipt for a particular win/income, it will be difficult to justify your earnings. 

• Get Familiar with a Form W-2G

You should never make withdrawals from your online casino account without consulting a tax specialist. You can be fined or, even worse – prosecuted for tax evasion.

A Form W-2G is a form used by the IRS in the United States to report certain gambling winnings and losses. Generally, a person must file Form W-2G if he or she wins $600 or more from playing casino games like slots, bingo, poker, roulette, and similar.

The document helps the government understand whether or not gambling winnings are declared and it is a very important document for calculating taxation. It includes the payer’s name, address, and social security number. It also includes the number/amount of gross winnings. 

• Gambling Losses May Be Deductible

Assuming you lose more than you win, you can report the losses on your annual tax reports. A tax specialist will be able to help you deduct gambling losses. 

To qualify for the deduction, you need to keep all receipts and documents that show your losses. There’s no way to deduct all your losses from the annual tax, but you can get rid of a major portion provided you have all the necessary documents.

If you are declared a professional gambler, then your reportable gambling income is computed differently. Pro players count gambling losses as business losses, so you might want to consider it if you are an elite player.

• Keep Track of All Gambling Records

Finally, you should remember to keep track of all your gambling records. You’ll have to submit receipts, vouchers, casino reports, and other documents in case you are audited by the IRS. 

Keeping track of everything is not only responsible but may also save you a lot of money (and even protect you from any trouble). All these actions will require time and effort but if you are dedicated, you can report your winnings without any problems. 

The Bottom Line

Winning money is the most probable reason you’re playing casino games, but you should never forget about filing a tax report about it. In this post, we explained how much money you can win at a casino before having to pay taxes. We wish you luck in your future gambling adventures, but don’t forget to report your winnings!