As long as you kept a proper log of your wins and losses, you will have gambling losses to deduct from your winnings thereby lowering your income tax. Assuming throughout last year you lost $100 here and there for a total loss of $12,000.
In your case, your $40,000 jackpot becomes taxable income. The reason you are required to fill out a W2-G form is that the Internal Revenue Service (IRS) requires casinos to report on a W2-G form all players' jackpots of $1,200 and above.
Before the casino hands over the money, they will make you fill out a W2-G form which lists your name, address and Social Security Number. Whether you won or lost money last year, keeping a proper record of your wins and losses is very important if you plan to keep more of your winnings at the end of the year.Īssuming you had a lucky day last year and hit a jackpot of $40,000. Hope you kept a logbook of your play throughout the year. TAX TIME and if you don't already know, gambling winnings are taxable income.
