PORTSMOUTH, Va. — If you’ve been hitting it big at the slot machines or poker tables, there’s one thing you should know: gambling winnings are considered income, therefore fully taxable, and you must report it to the IRS.
Professional tax preparer Yolanda Brown of Portsmouth’s Faith Select Tax Services said generally, anything more than $600 will be reported on a W2G.
“What we want people to understand: while you’re out having fun... Just keep in mind anything you win over $600 will be automatically reported to the IRS on a form called the W2G,” Brown said. “Whether you claim it or not, IRS knows you won that money, so they expect you to claim that money.”
Brown said you will also receive a W2G form from the casino.
Casinos will also report to the IRS if you’ve won at least $1,200 from bingo or slot machines, $1,500 or more from KENO, or more than $5,000 in a poker tournament.
Then, it's up to you to report the full amount of your gambling winnings on your 1040 form. You can claim your gambling losses by keeping a record and itemizing your deductions.
“Most casinos - especially at the new casino here in Portsmouth – anything you win over $600, they’re going to give you a W2G form before they give you your money that day," Brown said. “And it’s going to be reported to the IRS the same day.”
Virginia’s first permanent casino, Rivers Casino Portsmouth, opened just last month to big fanfare. Although winnings earned this year won’t be reported until the next tax season, Brown said it’s something you need to keep in mind if you’re hitting the casino throughout the year.
“And you will be taxed federal and on the state level, as well," Brown said.
According to the IRS, gambling income includes lotteries, raffles, horse races, and casinos. It also includes prizes like cars or trips.