For many of us, gambling means buying the occasional lottery ticket on the way home from work, but the Internal Revenue Service says that casual gambling also includes raffles, casino games, poker, sports betting—and, yes, even fantasy football. When you win, your winnings are taxable income, subject to its own tax rules. In most cases, the casino will take 25 percent off your winnings for the IRS before paying you. Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-G forms are not required for winnings from table games such as blackjack, craps, baccarat, and roulette, regardless of the amount. Calculate the Net Tax Cost/Benefit of Filing as a Professional Gambler There are two main tax benefits of filing taxes as a professional gambler. First, it allows you to net your wins and losses which leads to a much lower AGI which in turn affects a great deal of tax deductions. Prize Tax Rate Calculator for Cash If you win cash, calculating how much you’ll take home is fairly easy. Government requires 24 to 37 percent to be taken off the top of any prize over $5,000, depending on the prize amount. A flat rate of 24 percent will be taken immediately before you receive your money. The Tax Calculator helps you to work out how much cash you will receive on your Lotto America prize once federal and state taxes have been deducted. You just need to enter details of your prize amount and where you purchased your ticket. Below the Calculator, you can learn more about federal tax and the local tax rates in each participating state.
State and Federal Tax
If you win a prize of more than $5,000, there will be an initial 24 percent withholding for federal tax. If you win the jackpot you are highly likely to move into the top federal tax rate and your prize will be subject to a 37 percent withholding, whether you select the cash lump sum or the annuity.
The cash figure represents the jackpot fund on the day of the drawing, while the larger annuity value (the one that is advertised ahead of the drawing) is how much you would receive pre-tax after the cash sum has been invested over 29 years. Find out more about how the Lotto America jackpot works.
Casino Winning Tax Calculator Online
For prizes between $600 and $5,000, you do not owe any federal tax but you are still required to report your winnings on a federal income tax form.
As well as federal withholding, you will also owe state taxes on prizes above $5,000 in most participating jurisdictions. The only states which do not tax prizes are South Dakota and Tennessee. Here are the tax rates for the participating states:
Casino Winning Tax Calculator 2018
| State | Tax Percentage |
|---|---|
| Delaware | 6.6% |
| Idaho | 7.4% |
| Iowa | 5% |
| Kansas | 5% |
| Maine | 5% |
| Minnesota | 7.25% |
| Montana | 6.9% |
| New Mexico | 6% |
| North Dakota | 2.9% |
| Oklahoma | 4% |
| South Dakota | 0% |
| Tennessee | 0% |
| West Virginia | 6.5% |