Professional Tax Services of Long Island, LLC
Are my gambling winnings taxed?
In short, yes.
If you win $600 or more, you will be given a Form 1099-G with between
25% and 33% withheld up front. You will need to report your winnings on your personal income tax return. If you fail to show the income,
IRS computers will likely send you a "love letter" seeking additional taxes.
Plenty!
On occasion, someone who does not gamble pulls the lever
and hits the Jack Pot! For the rest of us, odds are that if you add up all your winnings and losses during the year, you will find
that your losses ate up much of your winnings.
You are able to write off gambling losses against gambling winnings. Caution...
one very common error is to net your gambling winnings and losses. You must report the income in full and separately write off your
losses. We can help you correctly take advantage of your gambling losses.
How do I prove my losses?
The IRS requires taxpayers to maintain a diary or similar record stating the game played, the establishment
were you played, and what your winnings and losses were. Further documentation to substantiate your diary is required. You can join
the casino promotion clubs at the comp desk. Their computers track your plays. The casinos can then provide you with a "win-loss statement".
You may also track other gambling winnings and losses by holding on to lotto tickets, raffle receipts, and other similar receipts.
Documentation
is not required to be submitted with the tax return, but should be held for six years in case of audit.
The IRS requires a 30% withholding on winnings paid to international visitors
gambling in the U.S. However, citizens of certain countries enjoy tax treaty provisions with the U.S. government that grant
special gambling tax breaks.
For example, Canadians may be able to recoup some or all of the U.S. federal tax withheld. Treaty provisions allow Canadians to write off gambling losses against winnings. Citizens of certain other countries can recoup withholding
tax regardless of offsetting losses. These lucky countries, at the time this web page was written, are: Austria, Denmark, Czech Republic,
Finland, France, Germany, Hungary, Ireland, Japan, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Russian Federation, Slovak Republic,
Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and The United Kingdom.
Consult a tax advisor familiar with your situation before applying information found here.
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Professional Tax Services of Long Island, LLC
