It’s Preakness Week in Maryland. Just Remember: Big Winners Owe Taxes!

• Do You Have To Pay State Taxes On Gambling Winnings In Oklahoma
• Do You Pay State Taxes On Gambling Winnings Money
• Do I Have To Pay State Taxes On Gambling Winnings In Nevada
• Do You Pay State Taxes On Gambling Winnings Against

Do You Have To Pay State Taxes On Gambling Winnings In Oklahoma

Baltimore’s Pimlico Race Course hosts the second leg of the Triple Crown this week. If you are lucky at the track, pick the winner, and win big, you must pay taxes.

Gambling Winners Can Owe Federal and State Taxes

In most cases, the IRS considers money or items you win by gambling to be taxable income. If you win items, you must report the fair market value of the items you win.

The IRS defines gambling winnings as including, but not limited to money or items gained by:

• Horse track betting
• Dog track betting
• Off-track betting
• Casino games
• Poker tournaments
• Lotteries
• Raffles
• Sweepstakes
• And, even Bingo

• According to the IRS, gambling winnings in any state, including New Jersey, “are fully taxable and you must report the income on your tax return. Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.”.
• Unfortunately, you are still bound to pay taxes to Michigan for your gambling win as a nonresident. As is often the case, there’s even a form for that. Worse yet, you will also have to report your winnings on your return for your own state, assuming that your state requires an income tax. However, there are a couple of bits of good news.

Lottery winnings are considered ordinary taxable income for both federal and state tax purposes. That means your winnings are taxed the same as your wages or salary. And you must report the entire amount you receive each year on your tax return. You might also owe state income tax on any money you win from betting on sports, depending on which state you live in. For example, Nevada doesn’t have a state income tax. But Maryland does, and it considers winnings from gambling taxable income. If you win money betting on sports, check with your state to see if it taxes gambling winnings. So, if you enjoy online gambling at sites like BetOnline or Bovada Casino, do you have to pay taxes? When you choose to gamble online, the money you earn is still taxable. Even if the site is located in another country, you still have to pay taxes. Online gambling is unregulated in most regions of the US, but taxes must still be paid.

Federal and local state (Maryland and Virginia) tax regulations require gambling winners to report their winnings on their tax returns.

What’s the Tax Rate on Gambling Winnings?

The IRS considers gambling winnings taxable. If you win a large sum ($5,000+ or 300 times the amount bet), the gambling establishment will generally deduct 25% from your winnings at the time of payout.

When gambling establishments deduct taxes from large winners, they provide the IRS Form W-2G to the winners and to the IRS. This form details the winnings and the deduction.

If you win at casino games, Bingo or Keno, your winnings are not typically subject to withholding. However, your winnings could be subject to underpayment penalties if you do not pay estimated taxes on time.

If you win a large item (such as a car or a trip), you are responsible for paying the fair market value of the prize.

Maryland Taxes on Gambling Winners

If you win $500+ at the Preakness or at any Maryland-based gambling or gaming establishment, you will owe taxes. Maryland’s gambling taxes apply to residents and non-residents.

If you win big ($5,000+), the gambling establishment will automatically withhold the taxes from your payout check.

Maryland requires all winners of more than $500 to file Maryland Form 502D within 60 days of the time you receive the prize money.

Virginia also Taxes Gambling Winnings

If you live in Virginia, travel to the Preakness, and win big, you will also owe Virginia taxes. Virginia taxes all gambling winnings over $600 at the state’s tax rate. You will owe Virginia taxes on your winnings even if you also paid taxes to Maryland. Yes, that is double taxation.

What About Gambling Losses?

You will not be able to deduct losses directly from the winnings at the time of payout. If you have gambling losses, you can deduct those loses as a miscellaneous deduction on line 28 of Schedule A, Form 1040. You can only deduct gambling losses if you itemize your deductions. You cannot deduct losses greater than your winnings.

Records You Should Keep

If you gamble often (but not professionally), you should keep records on your gambling winnings and losses in a log. You should record details such as:

• Date/description/location of the event
• Amount bet/ amount won
• Names of others with you at the time of the event

You should also keep any relevant documents (tickets, payout slips, and relevant forms, such as Form W-2G). You will need to document winnings and losses in order to deduct your losses on your income tax.

Professional gamblers have more expenses that are allowable. The IRS defines a professional gambler as someone who gambles on a regular and continuous basis. Professional gamblers report expenses (travel, hotel rooms, etc.) on Schedule C, the IRS Form for income from a trade or business. As with amateur gamblers, the pros cannot deduct expenses greater than their winnings.

If you go to the Preakness, have fun and if you win big and need tax help, let us know.

Are online gambling winnings taxable? Yes, whether you gamble at land-based or online casinos, the money you earn is subject to federal income tax. Known as gambling income, the money you earn from wagers and bets as well as lotteries, sweepstakes, etc. all must be taxed.

In some cases, you will be provided with tax forms that must be turned in to the federal government. The full amount of the gambling income minus the cost of the winning bet will be included on this form. Whether you receive this form or not, it’s important to know your responsibilities when it comes to filing income taxes.

The process of handling gambling taxes is not difficult if you know what to do. With this in mind, the OUSC team created this quicktax guide to help US players report their online gambling income.

Do US Players Have To Pay Taxes For Online Gambling?

So, if you enjoy online gambling at sites like BetOnline or Bovada Casino, do you have to pay taxes? When you choose to gamble online, the money you earn is still taxable. Even if the site is located in another country, you still have to pay taxes.

Online gambling is unregulated in most regions of the US, but taxes must still be paid. Just because you do not receive tax forms, does not mean that your winnings are not taxed.

To the IRS, it does not matter where the money is either. If you have funds in your online casino account, even if it’s an offshore site, it’s taxable. When dealing with online gambling earnings, it’s important to review this information with an accountant to ensure you pay the right amount of taxes owed.

Below you will find a list of gambling activities that the International Revenue Service considers taxable:

• Prizes
• Private Party Games
• Tournaments
• Scratch Off Tickets
• Other

How Do You Report Gambling Winnings?

The way you report your gambling activities will be dependent on how you win. If you receive a Form W-2G, then this is what you will turn in when filing taxes. Taxes must be filed before April 15th or you must ask for an extension. You will turn this form in as you do your other tax forms for employment to an accountant or tax filing company.

If you do not receive the W-2G form, then you will need to fill out a Form 1040, adding the winnings to Line 21 of the form. The full amount of gambling winnings will be placed on this line.

When filling out the 1040, you will need to configure your losses as well. The expense you had for bets, wagers, etc. will need to be deducted as an itemized deduction. This is done on the “Other Miscellaneous Deductions” line of Schedule A form. This will help to lower the tax amount paid on your total gambling income.

What Types of Records Do You Need?

Do You Pay State Taxes On Gambling Winnings Money

The information you record while enjoying online gambling can be used during the filing process. It’s important to maintain a log or diary of all your losses and winnings. Keep in mind the following information:

Do I Have To Pay State Taxes On Gambling Winnings In Nevada

• Dates: You will need to record the date and type of activity completed, including wagers and winnings.
• Location: List the name and location of the gambling facility. In the case of online gambling, this would be the website, such as MyBookie or Café Casino.
• Checks: If you are sent any checks in the mail from winnings, be sure to keep the check stub.
• Paperwork: For some players, winnings will be sent via mail and any paperwork should be kept and used during filing as needed.

Don’t Forget To Pay Your Online Gambling Taxes

Do You Pay State Taxes On Gambling Winnings Against

When you gamble online, it is important to enjoy yourself, but also remember to file your winnings! The IRS takes gambling money very seriously and you want to be sure that you pay your taxes accordingly. If you need any additional information, be sure to visit the official website of the IRS to find all the previously mentioned forms you will need fo file your taxes.