It’s a sad but true fact that the tax man wants a piece of your winnings. It’s not enough that they can get into your paycheck, they want to make sure they get a part of any money you win. So, how do you know whether or not you have to report your money to the IRS, keep reading and find out all you need to know to stay out of trouble with Uncle Sam.
First, you have to understand that what you have to report depends largely on the game you are playing when you win. The good news is that when you play in a casino, they know what games have to be reported and they give you the correct forms. However, just for your general knowledge, you need to know that withholdings on winnings are pretty much the same with the exception of bingo, slots and keno, these have their own rules which allow you to deduct your wager from your winnings and then only pay taxes on the net winnings.
The casino you play at may not give you tax documentation for winnings at the table games, unless you specifically ask for it at the end of the tax year. For example, I was at the Holland Casino in Amsterdam last year, won some money, but they didn't want to give me any tax documentation. However, this does not mean that you are not responsible for paying taxes on the money. If you hit a large jackpot, over $600 typically, you can ask the casino to take care of the taxes up front so that you don’t have to worry with it a the end of the year.
If you are fortunate enough to win a car, luxury trip or some other non-cash prize, you have to keep in mind that you do have to pay taxes on these items and that they do get reported to the IRS. You should receive some forms to complete and turn in when you get your prize that will tell you what you need to do.
Ultimately, it is up to you to make sure you do the right thing when it comes to your taxes, if you don’t, you could face stiff penalties.
Don’t try to skirt taxes, I did and somehow they found out about my windfall win and sent me papers to complete and pay my taxes. It’s not worth the hassle.