Table of Contents
Understanding IRS Gambling Winnings Tax
Gambling is fun, wonderful stuff, especially when you hit that jackpot. Whether playing on land in Las Vegas or online, keep in mind that winnings from gaming aren’t play money—they’re taxable. If you hit that jackpot, the IRS anticipates that you will report that income on Form W-2G. Here’s an explanation for what this form is, in addition to a discussion on gaming income being taxed, as well as how to report both winnings and losses in the correct manner.
What Are Gambling Winnings?
Gambling profits are money or awards you get from games of chance. Lotteries, casinos, horse races, raffles, sports betting, and even game shows can all provide this. The worth of that victory qualifies as income whether you win money or a reward like a car or a holiday.
Should you be in Las Vegas and hit a jackpot on a table game or slot machine, the money qualifies as gambling revenue. Even if you win while on vacation or through an internet app, it all counts in the eyes of the IRS.
How Are Gambling Winnings Taxed?
Gambling winnings are reported by the IRS as taxable income. Therefore, they have to be included on your federal tax return. At other times, the organizer or the casino might withhold some of your winnings for federal taxes and issue you with Form W-2G to report that amount.
Subject to the amount that one has won, the gaming house may automatically deduct 24% for taxes. This normally occurs when:
- You receive $1,200 or more from a slot machine or bingo.
- You win at least $1,500 on Keno.
- You receive $5,000 or more from a poker tournament.
The W-2G form informs you about the amount that you have won, as well as the amount withheld as tax. You’ll use this form to report on your Form 1040 when you report your income for the year.
How to Report Your Gambling Winnings
You will report gambling income on Form 1040, the typical U.S. tax return form. List your gambling winnings on the “Other income” line on that form. If you were issued a W-2G, use those amounts.
Even if you have not been issued a W-2G, it is still your duty to report all winnings from gambling. Honesty is demanded by the IRS, even if the winnings were small or if you were not issued one by the casino.
If you gamble as a business or vocation (e.g., as a professional poker player), winnings and expenses are reported on Schedule C of Form 1040. This form enables you to claim gambling as business and deduct associated expenses such as travel or admittance fees.
Table games at a casino, including blackjack, roulette, baccarat, or craps, qualify for an exception to the W-2G rule.
This does not mean that you do not report the income and pay tax on it if your winnings are not sufficient to require Form W-2G to be issued by an institution.
Federal Tax Brackets 2025
Understanding your federal tax bracket helps you figure out how much of your gambling income you might owe in taxes. In 2025, tax brackets depend on your filing status and income level. Here is the detailed table for your better understanding:
| 2025 Tax Rate | Single | Married Filing Jointly | Head of Household | Married Filing Separately |
| 10% | $0 – $11,925 | $0 – $23,850 | $0 – $17,000 | $0 – $11,925 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 | $17,001 – $64,850 | $11,926 – $48,475 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 | $64,851 – $103,350 | $48,476 – $103,350 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 | $103,351 – $197,300 | $103,351 – $197,300 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 | $197,301 – $250,500 | $197,301 – $250,525 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 | $250,501 – $626,350 | $250,526 – $375,800 |
| 37% | $626,351 or more | $751,601 or more | $626,351 or more | $375,801 or more |
What Are Gambling Losses?
If you lost more money gaming than you won, you may be able to claim those losses. But there’s some protocol to keep in mind. You can deduct gaming losses to decrease your tax bill if you claim deductions on Schedule A on your tax return. Also, keep in mind that you cannot claim more in losses than in winnings.
For instance, if you won $3,000 but lost $5,000, you can deduct only $3,000—the amount that you actually reported on your income.
How Are Gambling Losses Reported?
If you have losses to report, use Schedule A, which is attached to Form 1040. In “Other Itemized Deductions,” report your gaming losses. But don’t forget, keep good records, such as receipts, tickets, or logs, to support your losses in case the IRS questions them.
Also, it is not possible to use the standard deduction if you claim gambling losses. You will have to itemize.
Are Gambling Losses Deductible?
Yes, but only under specific conditions:
- You must report all your gambling income.
- You must itemize deductions using Schedule A.
- Losses can’t be more than your reported winnings.
Casual gamblers often don’t benefit much from this because the standard deduction is often higher than their itemized total. Still, if you had big wins and losses, it’s worth checking with a tax pro.
How Nonresident Aliens Are Taxed on Gambling Winnings
If you’re not an American citizen or permanent resident alien, you could still owe tax on Vegas winnings. The IRS usually taxes nonresident aliens at a 30% flat tax on gaming winnings. Casinos may withhold such an amount and use Form 1040-NR in place of the standard tax form.
Some nations have tax treaties with the U.S. with provisions for nonresidents to receive less or even obtain a refund. These treaties differ, so it is best to review the website for the IRS or seek professional guidance.
What Are Gambling Taxes for Professional Gamblers?
Professional gamblers earn their living from gaming. Their tax status is more complicated. They have to report their winnings as income on Schedule C, treating gaming as their business.
This lets them deduct business expenses like:
- Travel expenses to events
- Entry fee
- Hotel accommodations
- Costs associated with
But to qualify as a “pro gambler,” you must prove that this is your primary means of income and that you treat it as such, as a business.
Do Tourists Pay Tax On Vegas Winnings?
Yes! Whether you’re a U.S. citizen or a foreign visitor, your Vegas winnings are subject to tax. Casinos often withhold 24% for federal taxes from big wins and give you a Form W-2G. If you’re a tourist from another country, you may have to file a Form 1040-NR to report those winnings and possibly claim a refund if there’s a tax treaty.
Even if you win during a short vacation, those earnings count as income. Don’t ignore them when tax season rolls around!
Do States Tax Gambling Winnings?
Yes, many states tax gambling income on top of federal taxes. If you live in or win money in a state that taxes gambling, you may owe state income tax too. The rules vary depending on where you live.
For example:
- Nevada (where Las Vegas is located) has no state taxes on gambling income.
- States like New York, California, and Illinois do tax gambling winnings.
Always check your state’s rules or talk to a tax expert to know what applies to you.
Final Thoughts
Winning at gambling can be exciting, but dealing with taxes isn’t quite as fun. Whether you win a little or a lot, it’s important to know how to report your earnings correctly. Forms like Form W-2G, Form 1040, and Schedule A or Schedule C all play a role in making sure you stay on the right side of the IRS.
Keep records, stay informed, and when in doubt, reach out to a tax professional. That way, your lucky streak doesn’t turn into a tax headache.
GET FREE QUOTE FOR ALL OF OUR SERVICES
Black Ink will send you a free analysis of your current state and what would be the cost of managing either a separate accounting and bookkeeping services or a complete solution across New York, USA. Do get in touch and we will be happy to consult you with our bookkeeping services in NY, New York, USA.
