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Online Gambling USA / USA Casino Gambling Guide 2022 / What are the Casino Winnings Taxes by State in the USA 2022? Let Us Explain!

What are the Casino Winnings Taxes by State in the USA 2022? Let Us Explain!

Thomas Chambers
Author:
Thomas Chambers
Last Updated:
02/12/2022
Topic:
Casino Guide
Experiences:
Passion for soccer but also an expert on most sports markets

Is Casino Money Taxed? Read our Guide on Casino Taxes on Winnings

This article will examine taxes on gambling winnings in the US. Due to the varied gambling winning tax rates and laws in the US, this topic appears to be complicated.

However, it’s actually very simple: all online gambling winnings are taxable. The following guide will explain how to ensure that you’re filing your taxes correctly.

To see a US Gambling Guide for Beginners (2022) head to GamblingGuy. Here, you’ll find gambling explained.

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What’s Covered in This Article?

  • All US gambling winnings are subject to tax
  • You’ll learn how to file your gambling taxes correctly
  • Be aware of specific state laws regarding gambling winning tax

A Quick Look at How to Report Your Gambling Winnings 

Firstly, you must report all of your online gambling winnings to the Internal Revenue Service (IRS), regardless of how big or small they may be. This is a simple process; all you have to do is fill out a W2-G form available on the IRS website.

Whilst the federal gambling winning tax rate remains the same throughout the US, individual states have different tax rates. Make sure that you’re aware of the specific laws and tax rates of the State in which you’re gambling to ensure you’re reporting your winnings correctly.

It’s crucial that you report all of your online gambling winnings; if the government discovers any unreported income, you would have to pay tax, penalties and be fined. In the worst-case scenario, if the IRS considered that you had willfully evaded tax, you could even face imprisonment.

Need advice on sports betting bankroll management or gambling legal age? Take a look at our guides.

Tracking Your Winnings – Main Records to Keep

As stated previously, it’s vital that you file your online earnings for gambling-winning tax purposes. Consequently, it’s important that you keep a record of all of your gambling results, as this has several benefits.

Firstly, keeping track of all your gambling records allows you to deduct losses amounting to the same as your reported winnings. However, this requires that you are able to provide receipts, tickets, and statements, or any other documentation that displays the amount of both your losses and winnings.

Secondly, online casinos will only report casino winnings of over $1,200 for any video poker winnings or slot machine win, for which you should receive a W2-G form. Furthermore, online casinos will also not report casino winnings on table games except if you win $600 or above and 300x your wager. For more information on how to win at casino slots take a look at our corresponding guide.

Thus, if you want to benefit from the tax deduction on losses, it’s essential to keep a file of all your online casino winnings, even those that aren’t reported by online casinos. Check out GamblingGuy for a US online casino guide.

Reporting Your Winnings – Key Winnings Levels

Many people wonder how does betting work, but few stop to ask how gambling winning tax works. Even though all gambling winnings require federal taxation, payers only need to provide a W2-G form if they win any of the following:

$600 or more if the amount is no less than 300x your wager; $1,200 or over from bingo or slot machines; $1,500 or more in Keno winnings; over $500 in poker tournament winnings or any winnings that are subject to federal income tax withholding requirement.

If you provide the payer with your tax ID number, then they will withhold 25% of your winnings for gambling winning tax purposes. However, if you’re unable to give them this information, the gambling tax figure rises to 28% of your winnings.

Given that the payer will not do it for you, you must keep a record of your smaller winnings; otherwise, your gambling and taxes will become very difficult to keep on top of.

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Do I Have to Report Winnings From ‘Offshore’ Gambling Sites?

Many people believe that gambling winning tax doesn’t apply to offshore sites because they are overseas, but they’re entirely wrong. The US tax code dictates that all income for US citizens is taxable, regardless of where it came from.

As a result, the gambling winning tax applies to all winnings, including those acquired on both domestic and overseas websites. Offshore casinos will not report winnings to the IRS, so you must make a record of any such activity to abide by US gambling winning tax regulations. To help with your offshore betting, have a look at GamblingGuy’s best betting strategy for UK operators.

Professional Gambler Status – Advantages & Disadvantages

For some gamblers, it’s cheaper to be an amateur, rather than a professional, due to the differing gambling winning tax that is applied. Others, however, may benefit from gaining professional gambler status, which could actually reduce the gambling winning tax that they have to pay.

You should base this decision on your gambling skill, but there are also tax implications to consider. The professional gambler tax has greater deductions that can be applied to winnings. For example, they can deduct expenses such as travel, accommodation, and food, which would seem to be a clear advantage. To improve your gambling skill, take a look at GamblingGuy’s guide on the best slot machines to play.

However, they also have to pay a self-employment tax, which casual gambler doesn’t and they face scrutiny concerning their status. Previously, the IRS has contested some taxpayers’ professional status and has rejected such status for other gamblers who hold separate businesses. Whilst this is something to consider, you should speak to a tax advisor before coming to any final decision.

Taxation Rules – State Variations

In addition, some States do not charge any gambling-winning tax whatsoever. Though this may sound confusing, all of the relevant information regarding online gambling winning tax can be found easily on the internet and is clearly explained.

If you’re a young gambler, it’s also important to know the gambling legal age of the relevant State. The minimum gambling age varies from 18 to 21 depending on the State.

Enjoyed This? See Our Other Favorite Guides & Reviews

Here at GamblingGuy, our experts have put together extensive sports betting and casino guides and strategies for you to study. Our experts will explain everything from the definition of sports betting to the finer points of gambling.

There’s also advice on anything from how sportsbooks make money to gambling odds explained.

Conclusion – All the Taxation Basics YOU Need to Know!

In order to avoid any potential mishaps, here are 3 takeaways that will prevent any problems that you may have with gambling tax. Firstly, remember that all online gambling winnings are taxable, so you must report all winnings, even those that online casinos don’t provide a W2-G form for.

Secondly, to make sure that you’re able to report all winnings, keep verifiable records of all your gambling to guarantee you file your gambling tax report correctly. Finally, be aware of the relevant state gambling winning tax laws as well as those of the federal government to make certain that you’re abiding by both.

If you follow these 3 steps when it comes to tax on gambling winnings, then you’ll be able to enjoy your winnings without any accompanying problems.

If you want to research basketball betting for beginners or football betting for beginners, check out the many guides here at GamblingGuy. We also cover cricket, hockey, and countless other sports, along with specific leagues. We also provide tried and true gambling strategy guides.

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Legal Notice

Players must be 21 years of age or older or reach the minimum age for gambling in their respective state and located in jurisdictions where online gambling is legal. Please play responsibly. Bet with your head, not over it. If you or someone you know has a gambling problem, and wants help, call or visit: (a) the Council on Compulsive Gambling of New Jersey at 1-800-Gambler or www.800gambler.org; or (b) Gamblers Anonymous at 855-2-CALL-GA or www.gamblersanonymous.org.

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