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Will you pay Uncle Sam some of your gambling winnings?

Game 1 of the Western Conference Finals between the Golden State Warriors and San Antonio Spurs was an instant classic, depending on your sensibilities and your betting acumen. The Spurs were a 10 point underdog going into Game 1, and are heavily doubted to win the series. But a 2-point loss to the Warriors in the initial contest probably netted some people who doubted the Warriors some money.

If this describes you and you took in big money, are you required to report your winnings?

This post will explore that question. 

The answer depends on a number of variables; but generally, winnings that are 300 times more than your original bet may be deemed taxable income. This would require you to complete a W-2G form, which is an income reporting form to document your gambling winnings.

The obligation to report winnings doesn’t end with bets on sporting events. Casinos will obtain your Social Security number before paying out your winnings if you hit one of the big sweepstakes prizes advertised above slot machines. In some casinos, a 25 percent cut (to be paid to the federal government) will be taken out of your winnings.

Further, game show winnings can also be taxed. Essentially, you will pay taxes on the fair market value on any car, trip, or other non-cash prize you win.

If you have additional questions about how to deal with taxes on gambling winnings, an experienced attorney can help.

The preceding is for informational purposes only.  It is not legal advice. 

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Law Offices of Robert T. Leonard, APC

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