There is nothing quite like the rush of hitting a massive parlay or a long-shot future. But before you spend your winnings, you need to answer one sobering question: How much of this actually belongs to me?
In the United States, gambling winnings are considered taxable income. While casinos and sportsbooks automatically withhold 24% on huge wins (via Form W-2G), this is often just a down payment. Depending on your tax bracket and your state of residence, you could owe significantly more come April. Our Betting Tax Calculator cuts through the confusion, using marginal tax brackets to estimate your real take-home pay.
Betting Tax Calculator
US Federal + StateHow to Use the Gambling Tax Calculator
Calculating taxes is complex because the IRS uses “Marginal Tax Rates.” This means your gambling winnings might push you into a higher tax bracket, where those specific dollars are taxed at a higher rate. Here is how to get an accurate estimate:
- Enter Net Winnings: Input your total profit. Do not include your original stake, only the profit.
- Enter Annual Regular Income: This is crucial. We need this number to determine which “Federal Bracket” your winnings fall into.
- Why? If you make $50,000 a year, your winnings are taxed differently than if you make $500,000 a year.
- Select Filing Status: Choose Single, Married (Jointly), or Head of Household. This changes the income thresholds for federal taxes.
- Select Your State: State taxes range from 0% (Nevada, Florida) to over 10% (Hawaii, New York). The calculator automatically applies the estimated top rate for your selected state.
Related Tools: To figure out exactly how much profit you made before taxes, track your bets using our Margin Calculator. If you are looking for risk-free ways to grow your bankroll (which are also taxable!), check out the Arbitrage Calculator.
Real-World Examples: Location Matters
Where you live determines how much you keep. Let’s look at two scenarios for the same $10,000 win.
Scenario A: The Las Vegas Local (Nevada)
You earn $60,000 a year and win $10,000 betting on the Raiders.
- Federal Tax: ~$2,200 (22% bracket).
- State Tax: $0 (Nevada has no state income tax on gambling).
- Total Keep: $7,800.
Scenario B: The New Yorker
You earn the same $60,000 a year and win $10,000 betting on the Giants.
- Federal Tax: ~$2,200.
- State Tax: ~$600 (New York has high state income taxes).
- Total Keep: $7,200.
- Note: If you live in NYC, you would owe an additional City Tax, reducing this further.
Frequently Asked Questions (FAQ)
What is the “W-2G” form?
A W-2G is an IRS tax form sent to you and the IRS when you win a certain amount. For sports betting, this typically triggers if you win $600 or more AND the payout is at least 300x your wager (e.g., a massive parlay). Even if you don’t receive a W-2G, you are legally required to report all winnings.
Can I deduct my gambling losses?
Yes, but only if you Itemize Deductions on Schedule A. You cannot take the Standard Deduction and deduct losses. Furthermore, you can only deduct losses up to the amount of your winnings. You cannot claim a net loss to lower your tax on regular income.
Why is my tax bill higher than the 24% withholding?
The 24% withholding is a flat estimated rate. If your regular job puts you in the 32%, 35%, or 37% tax bracket, that 24% withholding wasn’t enough, and you will owe the difference when you file your return.
Do all states tax gambling winnings?
No. States like Nevada, Florida, Texas, Washington, and Tennessee generally do not tax gambling income at the state level. However, you still owe Federal taxes regardless of where you live.