Apps and online platforms make it easier than ever to gamble away your money.
Americans gambled with over $54.93 billion in 2022 a record-breaking amount.
Gambling winnings are considered taxable income by the federal government.
Lots of things are considered countable income, includingmoney from survey sites.Don’t Miss:6 Companies That Send People Money When They’re Asked Nicely
It doesnt matter if you won it at the horse track or on DraftKings.
Uncle Sam wants his cut.
If youre placing bets and winning big online, a tax bill might be waiting for you.
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Well keep it updated as offers changes or expire.
What Gambling Winnings Are Taxed?
All gambling winnings whether they take place online or in person are consideredtaxable incomeby the Internal Revenue Service.
They are taxed at your ordinary federal income tax rate.
You might receive a 1099-MISC for raffle or sweepstake prizes.
You may also receive W-2G if the odds of your winning bet were 300-to-1 or greater.
Thats like winning $7,500 on a $25 bet.
Failing to do so could trigger an audit or result in tax penalties.
This amount will be sent to the IRS, but keep in mind, its just an estimate.
You might get some of it back or owe more when you file your return.
Do States Tax Gambling Winnings?
Most states have a policy of taxing all income earned within their borders, regardless of where you live.
Unfortunately, writing off those losses can be tricky.
Its not like deducting stock market or investment losses.
it’s possible for you to only deduct gambling losses if you itemize your annual tax return.
Most people in fact, an estimated 90% of filers take the standard deduction instead.
So if you won $1,000 and lost $1,100, then $1,000 of your losses are deductible.
You also cant carry over gambling losses to the next tax year like you could with stock losses.
Youll need to keep a detailed record of your wins and losses if you choose to itemize.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer at The Penny Hoarder.
She focuses on retirement, taxes, investing and life insurance.
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