1. Do You Pay Taxes On Blackjack Winnings
2. Taxes On Winnings Calculator

Gaming Income

Generally, gambling winnings are reportable to the IRS if the amount paid is (a) $600 or more and (b) at least 300 times the amount of the wager. This requirement primarily applies to lotteries, sweepstakes and other big winnings from small bets. It does not apply to winnings from bingo, keno, and slot machines. Jan 23, 2010  Blackjack Winnings and Loses via taxes? Thread starter FreeStyle; Start date. You report all of your winnings and all of your losses. Any winnings greater than losses is added to your yearly income and affects your tax bracket as such. You can claim losses up to your yearly winnings. If you get audited they will review the casino logs. Those who play blackjack online may not realize that they are responsible for paying taxes on their gambling winnings. Most people may not play enough, or win enough, to think about paying blackjack taxes, but at Counting Edge we want every one to be a big winner. Here are a few things to know about online blackjack and taxes.

Do you need to pay taxes on your gambling winnings? Yes. Gaming income is taxable like any other income you receive throughout the year. Whether or not you receive a W-2G from the casino, it is your responsibility to report “earned” winnings on your personal income tax form. As it does for land-based gamblers, the same applies to online casino players.

Casinos do not issue a W-2G form unless your jackpot is $1,200 or more. The operator is not required to issue a W-2G if your winnings are under $1,200. If you play keno, you won’t be issued a W-2G form until you generate $1,500 or more in keno winnings per play. Poker players need to fill out a W-2G form if they win $5,000 or more from a tournament.

As readers can see, each gambling game has its own threshold for reporting taxes. The responsibility is with you and not the casino, though, so if an operator doesn’t give you a W-2G form, you still have to report your winnings. Any cash you win is reportable.

When you win a large sum of money and the casino issues you a W-2G form, remember they automatically send a copy to the IRS. If you don’t report those winnings, you’ll be notified by the IRS that your tax return does not match their records. Report your winnings.

For those filling out a form in 2019 for a 2018 return, note that gross gaming income is reported on Form 1040, Schedule 1, Line 21 under “other income”.

All the following forms of income from gambling need to be reported.

Online Casino Games

Online Slot Machines

Specialty & Lottery Games

Sports Books

Online Card Rooms

Mobile Casino GamesGames

Can Online Gamblers Report Net Winnings?

People often ask if they can report their net winnings – that is, the gross winnings minus their gaming losses. The answer is “No”. Place your gross winnings on line 21 of the tax return. Later, you’ll record your gaming losses for the year.

No matter what your losses for the year, line 21 only deals with winnings. Example: If you win $2,000 throughout the year playing online keno, you report that on line 21 whether you lost $200 or $20,000 playing keno.

Whether through oversight or bad practices, sometimes you might not receive a W-2G report from a gaming operator. If you don’t receive a W-2G, then you’ll have to keep track of your gross income number and report that amount to the IRS.

Gaming Losses

Gaming losses are reported on Schedule A (the itemized deductions) of the 1040 form, line 16, under the category “Other Itemized Deductions”. Once again, maintain a gaming diary or other running tally of your losses throughout the year if you want to legally deduct your gaming losses.

People ask us ways to lower the house edge at online casinos. I can think of no example which lowers your house edge more than keeping an accurate game log and deducting your losses.

One thing to keep in mind: a player’s gaming losses cannot exceed their winnings in a year’s time. If you win $1,000 and lost $2,000 over the course of a year, you report $1,000 in earnings and $1,000 in losses, even if your losses are higher than that. Also, you can’t carry losses forward to the next year. They’re simply lost.

Taxpayers are reporting that the 2018 Tax Cut and Jobs Act has reduced their eligibility for itemized deductions. This eliminates the need for a Schedule A form, but also eliminates a place to deduct gaming losses. Each taxpayer faces their own situation, but many may not be able to shelter gaming income because of the new minimal gaming losses law.

To claim winnings and losses, it is incumbent for you to keep a diary or gaming log. Since you might not know how this is done properly, let’s take a look at what is required.

• When – The type of specific wager and the date it happened
• Where – The name and address of the gaming establishment, or its online equivalent
• How Much – The amounts won and the amounts lost

The IRS recommends players keep supporting documentation for their tax claims. Keep bank statements, credit card statements, monthly online gaming site reports, and other game tickets you might have. Even if you don’t use bank wire transfers or other bank-related online payment methods, bank statements help you substantiate losses by showing corresponding ATM withdrawals and the like.

In the case of online casino gaming, it shows you moving money to a credit card, e-wallet, or crypto-currency wallet. Many land-based players keep their wins and losses on a player’s card or slots card. Online casino players have a cashier page. Also, sites with player rewards have a running tally of winnings and losses, so printouts of VIP program’s reports also help establish your numbers. Ask for your online casino to make a report of pertinent tax information.

Tips for Withholding Taxes

Keep the following recommendations in mind for withholding taxes.

1. Deducting Taxes at the Time of Winning

   Many gamblers prefer to have their taxes deducted from earnings at the time they have winnings. If you have earnings reported on a W-2G form, you can choose to have the taxes deducted at that time to avoid a big tax bill when you file your personal tax return. Consider this option if you tend to spend your winnings throughout the year.

2. Making an Estimated Tax Payments

   Players who win in smaller increments and don’t have winnings reported on a W-2G form have the option of making an estimated tax payment based on the taxes you predict you’ll need to pay. To make an estimated tax payment, you’ll need to use a 1040-ES form.

3. Pay On Time – Avoid Penalties

   Underpayment of income tax might result in penalties and interest being charged, so make timely payments to avoid further tax liabilities. A tax return has many factors which determine whether you owe a penalty, but paying into the system as you go is often the better choice for taxpayers.

Professional Gamblers’ Tax Returns

Professional gamblers face a different situation than amateur players or even high rollers do. A professional player is viewed as engaging in business, so their earnings go on a Schedule C part of a 1040 form.

While online casino gamers do not consider themselves professionals as often online poker players or sports handicappers, it’s important that those who do should file the proper tax returns. Also, the advice below applies to any professional online gambler.

• A professional gambler pursues gaming full time and with great regularity. The professional gambler makes a good faith effort to generate income for a livelihood. Their gaming is no hobby.
• Someone claiming to be a pro gambler has the burden of proof to make that claim.
• One’s approach to gambling is considered. Does a person make a studied approach to gambling, forecasting the trends and opportunities as one would in a regular business environment?
• The recreational nature of gambling is compared to the for-profit aspect of gambling. Is the player more focused on profit’s or recreation?
• The gambler’s skill and expertise are considered, much like one would for any other profession. Does the gambler produce consistent results? How many years of experience does a professional gambler have?
• The amount of time and effort a player puts toward the profession is considered. Does a gambler spend full-time hours on their gaming activities?
• The history of losses with respect to activity is considered. Overall success thus becomes a major component of evaluation — in fact, the key part of the evaluation.
• Once again, the amount of accounting and record-keeping is a key determining factor. Is the player methodical in their approach?

Declaring oneself a professional gambler has several advantages when filing a tax return.

• Deducting gambling losses – First, filling out a return as a professional helps a player deduct gambling losses. Such deductions largely have been eliminated for amateur players for 2018-2019 returns and beyond.
• Gaming as a business – Second, because the pro player treats their gaming sessions like a business, it also allows the player to deduct normal business expenses that further their professional career.

When playing online, expenses might include computer expenses, Internet service fees, research materials, and office supplies. If you have to travel for your gaming profession, then travel expenses, hotel rooms, business-related meals, and telephone bills might come into play. Anyone wanting to claim these expenses should document their expenses and keep the proper receipts.

One major drawback of reporting net gaming profit on a Schedule C form is the income is subject to self-employment taxes (in addition to normal income taxes). Even though a professional gambler will be able to claim additional expenses, the tradeoff might not be worth it. Analyze both possibilities (professional v. non-professional) before filing your return.

Do You Pay Taxes On Blackjack Winnings

IRS Resources for Gamblers

To read more about filing a tax return as an online gambler, go to the IRS websites to review their 2018-2019 publications related to gaming income. Read the current literature because the laws have changed significantly in the past two years.

These are some of the suggested IRS resources players should review when it comes to their taxes.

• Publication 525: Taxable and Nontaxable Income – Covers gaming income and winnings.
• Publication 529: Miscellaneous Deductions – Involves gaming losses and proper documentation
• Publication 505: Tax Withholding and Estimated Tax – As the name states, involves tax withholding and estimated taxes.
• Publication 4706: You Won! What Now? – Informational brochure for individuals with information on reporting gambling winnings.

About Kim Walker – CPA

Kim Walker is a Certified Public Accountant residing in Las Vegas, Nevada. Her areas of concentration are small business owners and their specific accounting and tax needs.

Services include business and personal tax return preparation, entity selection and business startups, business plan development, and IRS problem resolution and bookkeeping. You can inquire about her tax services by visiting her website.

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Yes, they are taxable. You are on the honor system to report the income. The casinos will not report any winnings to the IRS. It isn’t just on-line casinos, ANY net gambling winnings are taxable, regardless of where or how they were won.

Whether to cash out it all out at once is your decision. Assuming you are a U.S. citizen you are obligated to declare the income on your next tax return. If you don’t you could be charged with tax evasion. However this sort of thing is largely on the honor system. You are also allowed to deduct any gambling losses in the same year against your winnings.

Zero. You can not deduct a net loss at all. However if you have some W2G forms (generally given on wins of $1200 or more in slots, video poker, and keno) then you can deduct other losses against these wins. You should keep documentation for any losses you claim. You may be thinking of deducting losses on stocks. There you can deduct up to $3000 a year, and can carry over amounts larger than that to the next year. I’m still carrying over losses from the tech crash in 2000.

W2G forms are definitely something to think about when playing video poker at the larger bet amounts. Although you are obligated to pay taxes on your net win at the end of the year regardless of how many W2G forms you have, a payout of $1200 or more will necessitate a wait and obligate you to tip the person paying you. In less classy casinos a hand pay will also cause the tip vultures to start hovering around you. To avoid all of this sometimes the player should consider deviating from optimal strategy. For example with AAA88 in 10/7 double bonus the odds marginally favor keeping the aces only. However in a $2 to $10 game hitting four aces will pay over $1200, necessitating a W2G form, while a full house will stay under the limit. Considering the tax implications keeping the full house is the better play.

To answer your question I’ll assume a four of a kind pays 25 times the bet. Then a four of kind on the deal in a $0.20 50-play game will pay $0.20 * 5 * 50 * 25 = $1250. You will get a four of a kind on the deal once every 4165 hands, on average. If you were to drop the number of hands to 47 the win for a four of a kind on the deal would be 47 * $0.20 * 5 * 25 = $1175, staying under the W2G threshold.

I believe the policy at most casinos is that for large transactions you can have the funds any way you want. Before you consider laundering money by turning cash into checks be aware that casinos ask for a Social Security number and make a record of any transaction involving $10,000 or more.

You are subject to tax for any gambling winnings. However table games players are basically on the honor system. An exception that a W2G form is generated if a win is 300 for 1 or more odds and is over $600. That is usually only an issue with progressive jackpots. Also, if there is a cash transaction of $10,000 or over the casino is obligated to fill out a CTR, which stands for Cash Transaction Report. Yet these are nothing to worry about, and I think many big bettors are overly paranoid about them.

Only single wins of $1,200 or over are subject to withholding. If you won over $1,200 in small wins you would not be subject. When you press the cash out button the machine doesn’t know your citizenship and will just print a voucher for whatever you had. Any $1,200 or over win will always lock up the machine until an employee unlocks it. On high denomination games, usually starting at $10 or $25, the casino may keep a log of all your taxable wins. On a $500 machine, I’m sure they would have somebody standing right next to the machine do the paperwork. When you are done they will give you a single W2G form for the sum, and in your case subtract the withholding from that.

The W2-G is based on the gross win, not the net win. So, yes, if the player got a $5000 push on a Red, White, & Blue, he would get a W2-G.

Cliff from Aiea

In the U.S., any gambling winnings of any kind and any amount are taxable. However, with table games, it is on the honor system to report.

I forwarded this one to Brian, who is a former gaming regulator, and currently a casino manager. Here is what he said,

The casino would not know that someone was in the country illegally. If he had a valid passport, the jackpot would be honored. The illegal may not know this, be scared or they may not have a valid ID to show. Whenever someone wins $1,200 or more, ID is required for tax purposes. If someone doesn’t have his ID, the jackpot would be held in the cage waiting for them to claim it. In most cases, the person has legitimately forgotten their ID; however, sometimes you run into a problem, such as a minor who was gaming. If he doesn’t claim it, the money has to be added back into revenue because the deduction (jackpot) was never paid or there are abandoned property rules that prevail. Also, like the U.S., most countries tax worldwide income. To that end, the U.S. has tax treaties with several countries to withhold or notify the respective governments of monies won in the U.S. so Uncle Sam always gets his cut.

This is getting out of my area, but I'll try to help. The IRS web site says that for this purpose, the U.S. has tax treaties with the following countries: Austria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russian Federation, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom. Note that New Zealand is not on the list.

If you are a resident of one of the listed countries, and you hit a jackpot of $1,200 or more, then you should ask to fill out a form W8BEN. That should reduce, or in most cases, eliminate the withholding.

Even if you are not from one of the listed countries, or don’t fill out the form, you can still get the withholding back by filling out form 1040NR, or the simplified version the 1040NR-EZ.

My own tax accountant is Marissa Chien EA, author of Tax Help for Gamblers. She does an outstanding job, but some might consider her expensive. For a 1040NR she says she charges about $1,000. She adds this form is usually incorrectly filled out by most others. Her e-mail is .

IRS PDF’s:

• 1040NR-EZ instructions (PDF)
• 1040NR-EZ form (PDF)
• 1040NR instructions (PDF)
• 1040NR form (PDF)
• W8BEN instructions (PDF)
• W8BEN form (PDF)

Marissa is on Twitter at @taxpro4gamblers, where she occasionally answers tax questions to followers.

Title 31 is a regulation stating that the casino should make a record of cash transactions of over $10,000 by a single player in a single day. In such cases, a CTR must be filled out, which stands for Cash Transaction Report. This includes making multiple transactions, adding up to over $10,000. If you cash chips close to, but under, $10,000, the cage will likely want to make a note of it, in case you come back later that day, and go over the $10,000 daily limit.

My advice is to give them what they ask for. You have a lot more to fear by looking like you are avoiding CTRs than the CTRs themselves. In fact, I think there is nothing to fear from a legitimate CTR; the casinos generate lots of them. Personally, I have generated hundreds, to no known detriment. However, it raises lots of attention when you look like you are going out of your way to avoid them. I know one person who was rebuffed when he tried to cash in chips, because he had too many previous redemptions of just under $10,000. So, that is my two cents. Better suited to answer this is 'Brian,' a current Las Vegas casino manager, and former regulator, whom I like to turn to for procedural questions like this.

In a nutshell, Title 31 is the U.S. Department of Treasury Code designed to prevent money laundering. It requires that certain large cash transactions be reported to the Government. These are filed on FinCEN Form 103 “Currency Transaction Reports by Casinos” (FinCEN is the Financial Crimes Enforcement Network). Casinos are required to report all currency transactions in excess of $10K in a single day. The “day” doesn't follow the clock − a casino picks their day (e.g., 3 a.m. to 2:59 a.m.).

All Financial Institutions comply with Title 31. Casinos are considered financial institutions because of the types of transactions they perform, which are similar to those of a bank (e.g., check cashing, wires, loans, cash exchanges). Unlike traditional financial institutions, casinos conduct a great deal of transactions with unknown patrons. When you set up your checking account at the bank, you give them all of the necessary information needed to fill out CTRs. However, when cashing chips at the cage, the only way the casino can get this information is to ask. Casinos have to get all of the necessary information to fill out a CTR before the patron crosses the $10,000 threshold. Since the fines for non-compliance are hefty, they make a diligent effort to comply.

Casinos are apprehensive to give patrons too much information on Title 31 for fear of inadvertently breaking the law. Casinos are specifically precluded from aiding patrons in structuring transactions in such a manner as to allow them to skirt the requirements. When you ask questions, they prefer to point to a preprinted informational card and don’t like to discuss the matter for fear of divulging inappropriate information.

Circumventing Title 31 is relatively easy for undocumented transactions (e.g., chip buys, chip redemptions, etc.), but why would you want to? If the casino has reason to believe that you are purposefully conducting your transactions in an effort to avoid the reporting requirements of Title 31, they'll fill out a Suspicious Activity Report by Casinos form (aka SARC). If a casino learns that you exceeded the $10K threshold and they didn't get the required information, they will bar you from gaming until they get it. — Brian

Here is what the bill says:

In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000. -- Section 59C(a) page 337 H.R. 3962 (PDF — 3270 KB) or CNN.com

The surcharge would be applied before the gambler could deduct any offsetting losses. I verified this with Marissa Chien, co-author of Tax Help for Gamblers. For high-level slot players, it is not difficult to rack up W2-G forms in the millions per year. Most of these players will still have a net loss on an annual basis. Past the million point in gross income, the player will pay a 5.4% tax on any win of $1,200 or more, even if there is a net loss for the year. This is just my opinion, but I think that isn’t fair. If we must tax gambling winnings (which they don’t in Canada), it should be on the net, not the gross winnings, on an annual basis. Should this become law, it will ruin high-level slot play in this country.

Taxes On Winnings Calculator

Marissa is on Twitter at @taxpro4gamblers, where she occasionally answers tax questions to followers.

According to page 12 of IRS publication 529 (PDF), the minimum a gambling log should include is:

• Date and type of wager or wagering activity.
• The name and address or location of the gambling establishment.
• Names of other persons present during the gambling activity.
• Amount won or lost.

In addition, you should keep other documentation, such as W2-G forms and losing tickets. Personally, I keep my log in Excel and always retain W2-G forms and losing sports tickets. The book Tax Help for Gamblers by Jean Scott & Marissa Chien has a whole chapter on this topic.

This question was raised and discussed in the forum of my companion site Wizard of Vegas.
Marissa is on Twitter at @taxpro4gamblers, where she occasionally answers tax questions to followers.

I’m told that said provision (section 59C) was dropped from the final bill. That is the good news. The bad news is there is a new Medicare tax on unearned income above $250,000 for a married couple, starting in 2013. It looks like this may apply to gambling winnings before itemizing any gambling losses. Please ask me about this again in about two years for a status report.

This question was raised and discussed in the forum of my companion site Wizard of Vegas.

gambler

That is quite the difficult and controversial question. Before I answer, let me say that tax law is not my area of expertise, so you should consult a tax professional about your personal situation. Another better source than me about this is Tax Help for Gamblers by Jean Scott & Marissa Chien. Chapter three deals with this topic.

The general rule of thumb is that earnings are taxable and gifts are not. So a no-obligation comp would not be taxable. Anything that was given to you based on points, a drawing, a tournament, or earned some other way would be taxable. Granted this is not going to cover every situation, and some situations can be in a gray area. If you’re in doubt, consult a tax professional.

This question was raised and discussed in the forum of my companion site Wizard of Vegas.

First, you'll have to produce photo identification, or the casino will hold onto the money until you do. If you show identification but decline to produce or declare a valid social security or other tax identification number, then 25% to 30% will be withheld depending on whether the jackpot is more or less than $5,000, and whether you are from the United States or a foreign country with a reciprocal tax treaty.
As of 2011, such countries were Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bulgaria, Canada, China, Cyprus, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Mexico, Moldova, Morocco, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russia, Russia, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, The Czech Republic, The Netherlands, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan and Venezuela.
I've been trying to figure out the rules exactly, but it is giving me a headache. Please refer to IRS rules for issuing a W2G form for more information.
My thanks to Marissa Chien, co-author of Tax Help for Gamblers , and MathExtremist for their help with this question.
This question is discussed in my forum at Wizard of Vegas.