Betting on the Los Angeles Lakers to win the NBA title this year? How about the Los Angeles Dodgers winning the World Series? If you have gambling winnings, IRS wants to tax you.
Payors of $1,200 or more on winnings from bingo or slot machines, or $1,500 or more from keno, must file information returns on Form W-2G with the service center by February 28 following the calender year in which the winnings were paid.
Beginning this year the Internal Revenue Service will require all poker tournament sponsors to report tournament winnings of more than $5,000. Casinos will also implement federal withhold 25 percent taxes from gambling winnings.
You are required to report gambling winnings on IRS Form 1040 on line 21. However, keep in mind that you are allowed to offset gambling losses against gambling winnings. Because of high audit exposure against those who claim gambling losses it is important to keep a good record of your gambling losses such as dates, wager amounts and type of gambling activity.