Question for about casino winnings/taxes

[JohnnyTheFox]

Know someone who won 1,900 and chose to take the full payout instead of the casino withholding the taxes.
They are not working and swear that they wont have to pay/or pay a reduced rate because they are not working. The casino did make them however fill out a form{not sure of name of form}.

I told them you will have to pay regardless.
What say you?

 

[Melonfeud]

Not sure what the amount is before it's a mandatory 10% federal withholding, I've took the whole $1800 jackpot winnings from the Indian casino up in phoenix
Once,,, and never cared or worried about it

 

[JohnnyTheFox]

I believe the form they had to fill out was a G1 form, surprised you haven't had a visit from everyone's favorite uncle by now.

 

[Melonfeud]

I believe the form they had to fill out was a G1 form, surprised you haven't had a visit from everyone's favorite uncle by now.

,,,er,,me Too!
If they just stay away two more weeks ,I'll have my 401k/ IRA penalty problem squared away with them,,, and I can't remember if I'd signed papers on my jackpot( back in the 90's)
But they did shut me down tighter than a mine wedge till I went to see them ,back then

 

[JoeKing]

Winnings of a certain amount (not sure of the amount) are reported to the IRS by the casino. And you will not get your winnings from the casino until you fill out the paperwork that identifies the winner's pertinent information. Same thing goes for winning the lottery. The government is going to get their cut so just let them at it so you can go on to getting paid and enjoying your share.

 

[JohnnyTheFox]

Winnings of a certain amount (not sure of the amount) are reported to the IRS by the casino. And you will not get your winnings from the casino until you fill out the paperwork that identifies the winner's pertinent information. Same thing goes for winning the lottery. The government is going to get their cut so just let them at it so you can go on to getting paid and enjoying your share.

I believe the cutoff is around 1,200.00.They did fill out a G1 form, they are curious if they still have to pay the same % if they are working or not?

 

[YosemiteSam]

Gambling winnings over a specific amount have to be declared on your tax return.

The interesting thing is; you can write off gambling losses, but you have to itemize to do it AND you can only deduct up to the amount of your total winnings. (ie, gambling losses can't be used as a write-off if you haven't won anything)

I've never been a gambler, but if I remember correctly. Gambling winnings have a flat 25% tax rate and I believe winnings over $5k are subject to income tax also. So if I recall correctly, he will have to pay gambling taxes which is not subject to a minimum income tax as normal work is. (ie, make less than a certain amount, you don't pay any taxes)

Gambling tax is different than income tax and as noted. Once your gambling winnings reach a specific amount. It also becomes income taxable.

So if your buddy receives a visit from the IRS and didn't pay his gambling tax. He will be in default and will be forced to pay it and interest on that tax.

 

[Nightman]

If his taxable income for the year is less than 10,800 then he doesn't have to pay any taxes or even file

He was smart to take the full amount now but surviving on that seems tough

 

[JD_KaPow]

Gambling winnings over a specific amount have to be declared on your tax return.

The interesting thing is; you can write off gambling losses, but you have to itemize to do it AND you can only deduct up to the amount of your total winnings. (ie, gambling losses can't be used as a write-off if you haven't won anything)

I've never been a gambler, but if I remember correctly. Gambling winnings have a flat 25% tax rate and I believe winnings over $5k are subject to income tax also. So if I recall correctly, he will have to pay gambling taxes which is not subject to a minimum income tax as normal work is. (ie, make less than a certain amount, you don't pay any taxes)

Gambling tax is different than income tax and as noted. Once your gambling winnings reach a specific amount. It also becomes income taxable.

So if your buddy receives a visit from the IRS and didn't pay his gambling tax. He will be in default and will be forced to pay it and interest on that tax.

Gambling winnings are income, are reported as "other income" on your 1040, and are taxed as income. (They can be offset by losses, so we're really talking net gambling winnings.)

The other stuff is all about reporting and withholding requirements. If you win over a certain amount ($1200 in gambling winnings from bingo or slot machines, other cutoffs for other kinds of gambling winnings), the payer must issue you a form W-2G and withhold a certain percentage (25% if you give them your SSN, 28% if you don't) for taxes. That doesn't mean you'll end up paying 25% or 28%: it's just the amount that gets withheld, in the same way that income tax is withheld from your paycheck.

Edit: I see this isn't quite right. The $1200 cutoff above is about reporting. Withholding is only required if the winnings are greater than $5000 (or 300 times the bet).

For an unemployed person, it's entirely possible that the gambling winnings plus any other income don't rise to the level where he'll owe any income tax, in which case that withheld tax would come back as a refund.

 

[JoeKing]

I believe the cutoff is around 1,200.00.They did fill out a G1 form, they are curious if they still have to pay the same % if they are working or not?

Working or not, it's the same as long as the taxable income exceeds $10,800.

 

[BigStar]

I believe the cutoff is around 1,200.00.They did fill out a G1 form, they are curious if they still have to pay the same % if they are working or not?

Not sure of the cut off but this sounds about right (1,000-1,250.000). I won a tournament in Ballys Atlantic City Casino about 10 years back but had to fill out the same paperwork before I got actual cash. The payout was $1,500 for 1st place, but was a little let down when escorted to the cage with a floor manager after winning.

The winnings were somewhere around 1,200 (give or take) after taxes. I didn't know you get the lump sum without paying taxes cuz they led me to believe it was required before they could give me any payout (?) I would've kept the whole thing at that age knowing me.

 

[QuikZ06]

Lol, my worst habit is this damn gambling. Me and my brother have been to the casino 3 times in the last 4 days...we are adddicted bad. I don't quite understand the specifics if your not working or earning over a certain amount, but I do know they will give you a W 2G form when you win anything over $1199. They won't withhold any taxes if you don't want them to. As others already mentioned, you can offset the win with losses if you itemized deductions. I know we report winnings on our 1040, but again I don't know how it works when you don't earn over a certain amount.