Taxes are one of the biggest factors why people are not getting any richer. We have to pay a fixed percentage of money from our earnings to the government just for breathing. If you are wondering whether you have to pay taxes on slot machine winnings, you have come to the right place. Here is everything you need to know:
The short answer is ‘yes’: you do need to pay taxes on slot machine winnings. If you are looking for a longer answer, here is a list of all the factors that go behind paying taxes on slot machine winnings. Without further ado, let us begin:
- Your minimum profit
- The taxes you pay to the state
- What percentage of tax will you pay?
- What happens if you identify as a professional gambler?
- Taxes on non-US residents
Minimum winning limit:
As per the new tax reform law of 2019, all slot machine winners are legally obliged to file an IRS Form W2-G as soon as their profit earnings increase the threshold of $1200.
When submitting the IRS Form, winners are also required to share their Social Security number and the amount won. The amount of tax is deducted is a fixed percentage of the winnings of the user. This is true for most countries that have laws for paying taxes on slot machine winnings: especially in the USA.
Other than the tax that you have to pay on your winnings, you will also have to pay the standard state tax that is calculated depending on the state you are living in. Each state has its laws and percentage deductible. cndcasinobonus.com suggests contacting the concerned lawyer for more information.
Beware of scams:
Many of the senior citizens love to participate in casinos and their gambling activities. Oftentimes, when they win and are handed a form for tax returns, the tax payable is added to their total income, which dramatically increases the amount of tax that they will ultimately be paying.
By adding in allowable medical deductions that are about 10%, the elderly is often scammed for much more money that is bluntly known as a scam.
Percentage of tax on slot machine winnings:
On average, if you win over $1500, the tax rate you owe on your slot machine gamble winnings is 24%. This tax is not paid by the casino itself, but the winner. You will be given a form and told the basic procedure of how to handle and report these winnings with the tax attached.
If someone identifies as a professional gambler; i.e. their profession is gambling, their earnings from gambling will be handled as regular earnings and will be taxed normally.
For people not living in the US, if they gamble and win over $1500, they are required to pay an income tax of a flat rate of 30%. The rate does not increase or decrease no matter how big or small their winnings are. Canadians, however, may be given favors depending on the tax treaty laws.