Do You Have to Pay Taxes on Gambling Winnings?
Do you have to pay taxes on gambling winnings? Many gamblers always dream of the day they win big, but never of the other part of it – taxes. With great privilege come s great responsibility. In this case the privilege is a windfall win at the slots, blackjack, poker or roulette table or maybe even the lottery. The responsibility then comes in the form of taxes on your gambling winnings. Some may ask questions like what happens if I don’t report my gambling winnings? However, I doubt anyone wants an unfriendly visit from the IRS. That is why we have put together a few of the basic tips on how some states handle taxes on gambling winnings.
How are Gambling Winnings Taxed?
Remember it is your responsibility as the player to make sure to pay your taxes on winnings. With lotteries is usually deducted for you. The amounts you have to pay vary depending on how much you win and what state you are in.
Illinois & Nevada
Illinois and Nevada have the highest taxes on gambling wins. You can expect to pay between 25% to 28% in tax on your winnings. You can declare losses and claim from your tax in both states, but Ohio only allows a maximum loss deduction of 2%.
In New Jersey gamblers pay 5% tax on winnings between $10,000 and $500,000 and 8% for winnings above that threshold. Winners with no tax payer number will be required to pay8% even on wins below $500,000. The best thing about NJ gambling taxes is you can reclaim your losses from your winnings
In Ohio there’s an auto deduction of 4% on all tax winnings of $6,000 or more by the casino. After that, on the winnings you keep you must pay and additional individual tax de [pending on which City you’re in. Toledo and Columbus have the highest tax of 2.5%, while Cleveland and Cincinnati will tax you 2% and 2.1% respectively.