Are Your Big Winnings at Casinos Taxable?
When visiting a casino and determined to win, you need to make sure of your future financial success. All of a sudden the most unbelievable thing happens, and you win a huge sum of money. Even happiness of winning is in your mind, you must think about what you would do with so much cash. Would you travel around the world on your own yacht or would you buy a large house in Beverly Hills? If you happen to be a person of charitable nature would you give all that money to charity?
None of this could ideally and technically be correct as you`ve forgotten about something prerequisite that you are required to do first. Yes, you are right. You need to file your taxes, of course! If you didn’t know it, you are required to pay a large amount in taxes when you are a lucky enough to be a winner at any gambling game. These government taxes may make you crazy, however, let us find out the right way. This piece of information is especially useful for the American audience as gambling taxes exist in the USA and Las Vegas which is located there.
Won little sum? Just Put Them in a Pocket!
Small sums of gambling money, of course, don`t come under the ambit of taxation so if you bet a couple of bucks on slot machines and won yourself a decent amount of money to order a double pizza, you do not have to worry about taxes. In fact, in America, the government perceives your casino winnings as income and of course, you need to give up a part of your good luck earnings to the state. Now, this is of concern – how much is that exactly?
The taxes are fixed at 25% of your overall jackpot or whatever game it is at which you won. It is actually a theft but this is how it goes. However, it also has a reverse impact in the form of your loss of tax deductions. Do you need to win a sum that is large enough to require you to give up a quarter of it? It all depends on the nature of gambling activity. The amazing chance to your well-earned money is by playing poker. If you won up to $5000, you could keep it all with you.
In case you won at keno, then you required to pay taxes on as little as $1,500. If you won on slots machines and bingo, win of $1,200 is also taxable. In case you bet on horses in a horse race, you are taxed on as little as $600. Although, there are many more details and specific features of horse race gambling so do not avoid it all before venturing into this industry. The great news is that this gambling tax is not progressive and its percentage won’t increase when you win more money. Still, you have to give up a lot.
How to Earn Millions Without Paying Taxes
You`ll just have to pay yet another type of gambling taxes. Maybe they are not that bad, but still, professional gamblers don`t have to inform about their winnings in a way that all other casino customers do. Considering that professional gambling means more or less stable income, players have to pay federal taxes as all working people in the USA do. However, you’d better think twice before becoming a professional gambler as there are way too many risks in this profession and you never know when you will get your hands on your next big win or whether you`ll get paid at all.
Stuff that Will Save You Money
As already stated, American law has some ways to reduce the taxes payable from your winnings in the case that you lost big at a casino. Before understanding how to do it, let’s find out what the IRS is and how it functions. It is an Internal Revenue Service and you have to report to it some particular information about your income. You should keep a log of your winnings and losses to save money on taxes. Write down all sums of money, keep the receipts from gaming facilities, credit records, wagering tickets, and all documents that are somewhat related to your gambling tryst.
In addition, you should also note down the addresses of casinos, names of managers, dealers, and your fellow players if it is poker. It also includes a date and maybe even time. You can use a Form W-2G. If you haven’t lost anything, you are not eligible to file for losses as a tax deduction.
Make sure the sum of the deduction can`t be more than total of your winnings. For instance, if you won $5000, but lost $8000, your taxes may only be deducted by $5000. This law works in the case when winnings and losses match.
Tax-Free World
If you want to win a tax-free amount, no problem, you can just go to Europe, Canada or Australia to go for a tax-free gambling adventure! Go for a memorable Euro-trip and engage in fun, entertaining and gambling sessions.
Here are some EU countries that are tax-free: Austria, Czech Republic, Denmark, Finland, Germany, Hungary, Italy, Luxembourg, Malta, Belgium, Bulgaria, Romania, Sweden, and United Kingdom.
