How Much Can I Win Gambling Without Paying Taxes

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How much are my gambling winnings taxed in Indiana? Effective for tax years after 2017, the federal rate on winnings over $5,000 is 24%. Winnings under that benchmark of $5,000 must also be reported depending on their amounts and sources. Currently, Indiana’s personal income tax rate is 3.23%. Almost all gambling winnings are subject to this tax. For examplle, the casino must file a W2-G if you win $1,200 or more playing slots; but only if you win $1,500 or more at keno. Thus, if you have one or more wins exceeding the reporting thrseshold, the IRS will know that you earned at least that much gambling income during the year.

  1. How Much Can I Win Gambling Without Paying Taxes Paid
  2. How Much Can You Win Sports Betting Without Paying Taxes
  3. How Much Can You Win Gambling Before Paying Taxes
  4. How Much Money Can You Win Sports Gambling Without Paying Taxes
  5. How Much Can You Win Sports Gambling Without Paying Taxes

Gamblers understand the concept of win some, lose some. But the IRS? It prefers exact numbers. Specifically, your tax return should reflect your total year’s gambling winnings – from the big blackjack score to the smaller fantasy football payout. That’s because you’re required to report each stroke of luck as taxable income — big or small, buddy or casino.


If you itemize your deductions, you can offset your winnings by writing off your gambling losses.

It may sound complicated, but TaxAct will walk you through the entire process, start to finish. That way, you leave nothing on the table.

How much can I deduct in gambling losses?

You can report as much as you lost in 2019 , but you cannot deduct more than you won. And you can only do this if you’re itemizing your deductions. If you’re taking the standard deduction, you aren’t eligible to deduct your gambling losses on your tax return, but you are still required to report all of your winnings.

Where do I file this on my tax forms?

Let’s say you took two trips to Vegas this year. In Trip A, you won $6,000 in poker. In the Trip B, you lost $8,000. You must list each individually, with the winnings noted on your return as taxable income and the loss as an itemized deduction in Schedule A. In this instance, you won’t owe tax on your winnings because your total loss is greater than your total win by $2,000. However, you do not get to deduct that net $2,000 loss, only the first $6,000.

Now, let’s flip those numbers. Say in Trip A, you won $8,000 in poker. In Trip B, you lost $6,000. You’ll report the $8,000 win on your return, the $6,000 loss deduction on Schedule A, and still owe taxes on the remaining $2,000 of your winnings.

What’s a W-2G? And should I have one?

A W-2G is an official withholding document; it’s typically issued by a casino or other professional gaming organization. You may receive a W-2G onsite when your payout is issued. Or, you may receive one in the mail after the fact. Gaming centers must issue W-2Gs by January 31. When they send yours, they also shoot a copy to the IRS, so don’t roll the dice: report those winnings as taxable income.

Don’t expect to get a W-2G for the $6 you won playing the Judge Judy slot machine. Withholding documents are triggered by amount of win and type of game played.

Expect to receive a W-2G tax form if you won:

  • $1,200 or more on slots or bingo
  • $1,500 or more on keno
  • $5,000 or more in poker
  • $600 or more on other games, but only if the payout is at least 300 times your wager

Tip: Withholding only applies to your net winnings, which is your payout minus your initial wager.

What kinds of records should I keep?

Keep a journal with lists, including: each place you’ve gambled; the day and time; who was with you; and how much you bet, won, and lost. You should also keep receipts, payout slips, wagering tickets, bank withdrawal records, and statements of actual winnings. You may also write off travel expenses associated with loss, so hang on to airfare receipts.

Use TaxAct to file your gambling wins and losses. We’ll help you find every advantage you’re owed – guaranteed.

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So you’ve won a jackpot on the slots or defied the odds on a sports bet in Indiana. Other than bragging on social media, one of the next things you have to do is give the federal and state governments their cut.

Winnings from all forms of gambling are taxable income, including winnings from:

  • Lottery
  • Slots
  • Table games
  • Sports betting
  • Horse racing

Even if you put money down and win an organized Rock-Paper-Scissors competition, you have to pay taxes on the winnings. Even non-cash prizes like merchandise have to be reported on your federal and state income tax returns.

The idea that the Internal Revenue Service and the Indiana Department of Revenue won’t know is folly. The parties which pay out the prizes, whether that be casinos, sportsbooks, whatever, keep receipts and report them.

How much are my gambling winnings taxed in Indiana?

Effective for tax years after 2017, the federal rate on winnings over $5,000 is 24%. Winnings under that benchmark of $5,000 must also be reported depending on their amounts and sources.

Currently, Indiana’s personal income tax rate is 3.23%. Almost all gambling winnings are subject to this tax.

How Much Can I Win Gambling Without Paying Taxes Paid

Casinos typically withhold 25% of your winnings for tax purposes. That is only the norm if you provide them with your social security number, however. If you decline that option, they usually withhold 28%.

How to determine if your winnings are taxable income

Another service the casinos usually provide for mutual benefit is sending you the appropriate paperwork. Fortunately, Indiana allows you to fill out the same form for both purposes.

Form W-2G, Certain Gambling Winnings reports your winnings for the year to both the IRS and you, in case you haven’t been keeping track.

The amount on this form will include any winnings from the year which qualify for federal taxes. That total will consist of:

  • Your winnings (not reduced by the wager) of at least $1,200 from a bingo game or slot machine
  • The winnings (reduced by the wager) of at least $1,500 from a keno game
  • Your winnings (reduced by the wager or buy-in) of at least $5,000 from a poker tournament
  • The winnings (except winnings from bingo, slot machines, keno, and poker tournaments) reduced, at the option of the payer, by the wager are $600 or more, and at least 300 times the amount of the bet
  • Your winnings that are subject to federal income tax withholding (either regular gambling withholding or backup withholding)

How to report your gambling winnings to the IRS

The IRS requires you to report the total of your all qualifying gambling winnings for the year on a Form 1040. If you get the W-2G from the payers of your winnings, it’s a simple process of adding up those winnings and the amount of tax they withheld and then transferring those totals onto the 1040.

Add up all the numbers from Box 1 on the W-2G forms and separately, calculate the sum of all the numbers from Box 2. Place the Box 1 total on line 21 of the 1040 and place the Box 2 sum on the line designated as federal income tax withheld.

Even if the game operator didn’t do its job and you didn’t receive a W-2G, that doesn’t mean you’re off the hook.

You are still required to report all your gambling winnings from the year on the form 1040. To do that, fill out Schedule 1 with your gambling winnings as “Other Income.” Attach that to Form 1040 and include it in your personal income tax return.

So what if you weren’t flying solo, but pooled your resources together with others to maximize your chances of winning it big? That doesn’t change much.

Paying taxes on a shared prize

The IRS is prepared for this scenario. Form 5754is your go-to.

This is the form to use when you receive gambling winnings, not in your name on a W-2G. This form is also appropriate when you’re part of a group of two or more people sharing winnings.

The important thing to remember is that Form 5754 should not be included in your income tax return. Fill it out and give it to the person who received the W-2G.

Keep a copy for your records. The person who received the initial W-2G should submit all the appropriate 5754s back to the casino so they can correctly record the transaction.

The casino will then send each person their own W-2G. From there, the process is identical to how you would report any individual winnings.

How to report your gambling winnings to Indiana

How Much Can I Win Gambling Without Paying TaxesGambling

As previously stated, Indiana is a state that allows you to use Form W-2G for your state income tax return as well. To do so, transfer the amount from Line 7 of your Federal 1040 to Line 1 of your IT-40.

If all or part of your winnings came while you were outside of the Hoosier State, you still must report them. That includes winnings from multistate lotteries. Report them just as you would if they came from an in-state game.

There is one legal way to reduce your tax liability from gambling winnings. It only applies if you opt to itemize your deductions, however.

Indiana and IRS gambling deductions for taxes

The IRS does allow a deduction for gambling losses. It cannot be claimed if you take the standard deduction on your return, however.

How Much Can You Win Sports Betting Without Paying Taxes

For those who itemize, gambling losses go on Line 28 of Schedule A, Form 1040. You cannot claim a deduction larger than your reported winnings.

And just because you deposit more than you withdraw from your bank account is not necessarily sufficient evidence. You must prove your losses.

How Much Can You Win Gambling Before Paying Taxes

You also cannot deduct expenses incurred along the way. The cost of your hotel and meals are just part of the necessary out-of-pocket expense.

If you opt to itemize and claim gambling losses, you’re better off keeping the following for your records:

  • The date and type of each wager
  • Where you placed the bet, i.e., the name of the casino
  • How much you won or lost
  • Wagering tickets
  • Canceled checks
  • Credit card records

Casinos can make this easy for you as well. If you’re part of their rewards programs, getting an annual summary of your gambling losses is quite simple.

The same goes for any winnings from the latest gambling option, legal sports betting in Indiana.

Taxes on sports betting winnings

With legal sports betting new to Indiana, there are plenty of people betting on college football and the NFL. Your parlay on Notre Dame football or Purdue football games is also taxable income if it exceeds $600. It doesn’t matter whether you placed your wager at an Indiana online sportsbook, inside a casino, on a kiosk at an off-track betting site or on your phone from your couch.

Just like other types of gaming operators, the book you placed your bet with should send you a W-2G. You can use that to report your winnings and withholdings to both Indiana and the IRS.

The positive side of that is just like any other gambling losses; the money you lose betting on sports can be deductible if you choose to itemize. Just as with any other deductions you claim, keeping detailed records is essential.

With any money that is deemed income by the IRS, it’s important to know what your specific tax bracket is to avoid underpayment. The highest federal tax rate is currently 35%, and that’s in addition to the 3.23% you would owe the state on your sports betting winnings.

How Much Money Can You Win Sports Gambling Without Paying Taxes

As most operators only withhold 25% of winnings automatically, you may owe additional federal tax above and beyond what the operator withheld based on your personal income. That amount would be due upon filing.

That applies equally to those who play casino games in person and online in the Hoosier State.

How Much Can You Win Sports Gambling Without Paying Taxes

Taxes on online casino games and online poker

While online poker and online casinos have yet to be legalized, when they do, taxes will work the same as they do at land-based casinos.

The operators of the games should send you a W-2G summing up all your winnings from the year once they reach certain thresholds depending on the type of game. Those are:

  • Your winnings (not reduced by the wager) of at least $1,200 from a bingo game or slot machine
  • The winnings (reduced by the wager) of at least $1,500 from a keno game
  • Your winnings (reduced by the wager or buy-in) of at least $5,000 from a poker tournament
  • The winnings (except winnings from bingo, slot machines, keno, and poker tournaments) reduced, at the option of the payer, by the wager are $600 or more, and at least 300 times the amount of the bet
  • Your winnings are subject to federal income tax withholding (either regular gambling withholding or backup withholding)

With the W-2G in hand, you have what you need to report your winnings and pay any applicable taxes to both the state of Indiana and the IRS. Let’s review all the pertinent information that is relevant regardless of where your winnings came from:

  • The gaming operator you placed your wagers with should send you a W-2G
  • You can use the W-2G to report your winnings on both your federal and state taxes
  • How much federal tax you pay depends on your personal income
  • The Indiana rate is 3.23%
  • If you don’t get a W-2G, you still have to claim your winnings as income if they qualify
  • You can deduct your losses on your federal return, but you must itemize
  • If you do go that route, keep any and all records from the transactions

With those simple things in mind, you too can stay safe from tax fraud while gaming in Indiana. Enjoy the games!