In the United States (and many other jurisdictions), gambling winnings are fully taxable income. However, the IRS allows you to deduct your gambling losses up to the amount of your winnings if you itemize deductions.
This Tax Estimator helps you calculate your Taxable Income and estimated tax bill so you aren’t caught by surprise in April.
How Gambling Taxes Work (USA)
Disclaimer: We are not tax professionals. This tool provides an estimate based on standard withholding rates.
- Reporting Winnings: You must report 100% of your winnings (Form W-2G) as income.
- Deducting Losses: You can deduct losses, but only if you itemize your deductions on Schedule A. You cannot deduct more than you won.
- The Tax Rate:
- 24% Withholding: Casinos automatically withhold 24% for winnings over $5,000.
- Marginal Rate: Depending on your total income, you might owe up to 37% at the end of the year.
Example: The “Net” Win
You won a $10,000 jackpot on slots. However, over the year, you have documented losses of $4,000.
- Gross Income: $10,000.
- Deduction: -$4,000.
- Taxable Gambling Income: $6,000.
- Estimated Tax (24% bracket): $1,440.
- Net Profit: $4,560.
Frequently Asked Questions (FAQ)
Do I pay tax if I lost more than I won?
Technically, you still report the winnings as income and then deduct the losses to zero out the tax liability. You generally won’t owe tax on the gambling money, but the increased “Gross Income” might affect other tax benefits.