This is probably the least favorite blog post I will ever write, so I’ll try to make it short and painful. If you live in the United States, tax day is coming up in April. You are no doubt dreading this day even more so than you dread looking at the deductions on each paycheck. If you play blackjack for real money, here’s what you need to know.
You are probably aware that if you hit a jackpot of $1,200 or more at a casino, the casino will then take down all of your personal information and have you fill out a tax form on the spot. The casino will then pass that information along to the IRS. What you may not know is that any amount you win on gambling must be reported. Even if your net win was $1, you must report that $1 as income received from gambling.
Yes, it’s true. And it’s not just casino games. According to the IRS, you must report winnings from all gambling, which includes but is not limited to, winnings from casinos, horse races, lotteries, and raffles. That means if you play a scratch-off game and win $5, you’re required to report that to the IRS. Yes, I realize that no one does that, but to be in full compliance with the law, you must.
The IRS taxes all income you make, including from a casual game of blackjack. The good news is that if you itemize your deductions, you can also report your losses and receive deductions for those. Hey, at least the losses are good for something! To deduct your gambling losses, “the amount of losses you deduct may not be more than the amount of gambling income reported on your return,” according to the IRS website.
What this means is that when you are gambling, you need to be a good bookkeeper. Record how much you wager, how much you make and how much you lose for each gambling session. That way, you can accurately report your tax information to the government. Recording that information is also good for your budgeting and I recommend everyone do it to make sure they aren’t spending too much money at casinos.