If you win big at a casino do you have to pay taxes? Here’s what to know in California
Giant numbers flash, as eyes across the casino stare in awe and envy at you. You just won big at the casino and everything seems possible now — bills paid, vacations to plan and maybe a new house?
But don’t get too blinded by the bright neon lights from the game machines just yet. You have taxes to pay.
California has several rules on how gambling wins are taxed. A certified public accountant broke down the regulations:
Does the casino take out taxes before you leave?
It all depends on what type of gambling you did, how much you won and the ratio of earnings to the wager, Lisa Greene-Lewis, a CPA and tax expert at Turbo Tax, wrote to The Bee in an email statement.
Wager refers to how much you put down as a bet.
Lewis explained that the wager is subtracted from the total wins to determine whether taxes need to be deducted.
The casino will take 24% before you leave the vicinity if:
- The winnings, after the wager is subtracted, is more than $5,000 for sweepstakes, wagering pools, poker tournaments, lotteries and wagering transactions for races
- The winnings are at least 300 times the amount that was bet
The 24% tax withholding typically does not apply to wins from bingo, slot machines or keno, Lewis said, but you may have to provide the casino with your social security number or ITIN to avoid deductions.
When will I need to report my casino winnings?
You’ll need to report your wins to the IRS, even if they are small, according to the Turbo Tax blog.
Lewis said you’ll need to fill out Form W2-G during tax season if you won:
$600 or more from sweepstakes, wagering pool, lottery, or at a horse track, if winnings are 300 times your bet
$1,200 or more at a slot machine or bingo game
$1,500 or more in keno winnings, minus the amount you bet
$5,000 or more in poker tournament winnings, minus the amount you bet or buy-in price
When do I report my winnings?
If you won money in 2023, you’ll claim it in your 2023 taxes in 2024, Lewis said, regardless if you got the W2-G form.
“Don’t forget that if you can itemize your deductions, you can claim your gambling losses as an itemized deduction up to your winnings,” Lewis added.
You’ll also need to include it in your California state taxes as federal adjusted gross income, too, according to the Franchise Tax Board.
The tax board’s website states that “All gambling winnings are taxable” including casino winnings.
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