What Is Form W-2G: Certain Gambling Winnings?

Form W-2G: Certain Gambling Winnings is a tax form used by taxpayers to report money earned from gambling activities to the Internal Revenue Service (IRS). The 🗹IRS requires tha♏t taxpayers report all income they receive from gambling just as they must report income from employment or investments.

Taxpayers receive the form from casinos and gambling institutions and must report the income on their tax return.

How Form W-2G Works

The 澳洲幸运5开奖号码历史查询:Internal Revenue Code (IRC) cites gambling winnings as 澳洲幸运5开奖号码历史查询:taxable income and the IRS wants to know how much you win. This information is d✅ocumented on 🎉Form W-2G.

It identifies you, your Social Security or your taxpayer identification number, the type of wager made, and the value of anything you received in return. This includes cash winnings as well as the 澳洲幸运5开奖号码历史查询:fair market value (FMV) of tangible prizes. Other key information includes:

• The amount of income tax withheld (federal, state, and local)
• The name of the locality
• The amount of any identical wages

The gambling institution must complete and submit Form W-2G to the IRS to document your winnings. It also sends you a copy so you can include this income on your tax return. Form W-2G also reports winnings to state and local tax authorities if you live in a jurisdiction that imposes an income tax and taxes gambling winnings.

Form W-2G is available on the .

Form W-2G Reporting Requirements

Most winning wagers result in Form W-2G being issued by the institution or gambling facility if the prize is significant enough to meet IRS reporting requirements. The IRS defines reportable winnings as cash or the FMV of any tangible prizes received, such as a vehicle or vacation. It cites winnings from "lotteries, raffles, horse races, and casinos" but it stresses that reportable winnings aren't limited to these games and wagers.

The reporting requirements depend on the game you played and how much you won. Form W-2G is required if you win $5,000 or more at a poker tournament or $1,500 or more playing keno. The limit is $1,200 for slot machines or bingo games and only $600 if your winnings are 300 times the amount of your wager or more. This classification includes gambling pursuits other than poker tournaments, keno, slot machines, or bingo.

Withholding Requirements

In some cases, gambling institutions must withhold taxes from your winnings, just like an employer does from your pay. Withheld taxes appear in Boxes 4, 15, and/or 17 of your W-2G, depending on whether the withholdings were federal, state, or local taxes.

Federal tax is withheld at 24% if your winnings amount to $5,000 or more and result from a lottery, wagering pool, or sweepstakes. The 24% rule applies if your winnings are 300 times the amount you bet or more. Taxable winnings are what remains after deducting the amount of your wager or other fees that were required for you to play and participate.

Winnings may also be subject to 澳洲幸运5开奖号码历史查询:backup withholding at the 24% rate. Poker tournament winnings as well as those deriving from keno, bingo, or slot machines fall into this category. Backup withholding would occur if your winnings exceed the thresholds for regular reporting requirements or if you fail to give your accurate Social Security or taxpayer ID to the gambling institution.

Withholding on noncash prizes can be as much as 31.58%.

Reporting Your Winnings

How you report your winnings on your tax return depends on whether you're a professional gambler or someone who just likes to have a little income-producing fun on weekends. Professionals report on Schedule C just like any other self-employed individuals, contractors, sole proprietors, or other business owners.

It's a little more complicated for the average taxpayer. You must file with your tax return. The schedule includes a slot for gambling winnings on line 8b. Your winnings are calculated just as they are for withholding purposes. You can subtract your wagers from the total and report the balance.

Gambling losses can be reported as well and effectively subtracted from your winnings but you must file another form with your tax return to do this. Losses up to the amount of your winnings can be claimed on 澳洲幸运5开奖号码历史查询:Schedule A to reduce your overall taxable income for the year but you can't claim a loss greater than the amount you won and reported on Schedule 1.

There may be a downside to claiming your losses, however. Schedule A records and claims 澳洲幸运5开奖号码历史查询:itemized deductions and you can't itemize and claim the standard deduction for your filing status, too. You'll want to choose the option that results in the most money being subtracted from your overall⛦ income to arrive at your taxab𒀰le income for the year. You'll otherwise give the IRS more tax money than you have to.

The Bottom Line

You must report your gambling winnings on your tax return even if you don't receive a Form W-2G from the gambling institution. Contact the institution and the IRS if you think you should have received the form, particularly if you're unsure about how much you won and whether and to what extent any taxes were withheld. You must also report winnings that are less than the W2-G reporting requirements. You might want to consult a tax pro🅷fessional if you🅘r winnings are significant.