Tax Calculator Gambling Winnings

When it comes to gambling, be it online or in a casino, there will always be winners and losers. But, even winners can turn to losers if they don’t declare and pay taxes on gambling winnings.

Indiana allows different types of gambling, including horse racing, lottery, sports betting, slots, and table games. It requires you to pay betting tax on cash and non-cash prizes such as merchandise.

Using a free-to-use gambling winnings tax calculator can help you determine the amount of casino tax that you will pay. Below, you will find a free and quick-to-use calculator to work out exactly how much tax you will need to pay on your winnings in the Hoosier state and other US states. In this post, we also discuss Indiana gambling winnings taxes.

If you get lucky in one of Indiana’s casinos, a riverboat casino, or using one of the legal IN sportsbook apps, you will need to figure out just how much tax you will have to pay.

Are Gambling Winnings Taxable in Indiana?

Indiana taxes all gambling wings. Residents pay tax on all gambling winnings like those from pari-mutuel horse races and Indiana riverboat casinos.

Gambling and taxes for non-residents are on payouts they get from Indiana’s horse racing tracks and riverboats. A lottery tax calculator shows the tax that all players in Indiana should pay.

Parlays on Purdue football and Notre Dame football are taxable if they are over $600. The sportsbook will send a W-2G form to you to report all winnings to the IRS and the Department of Revenue.

It is important to know your tax bracket to pay the right tax to the IRS. Indiana has a federal gambling tax rate of 35 percent besides the 3.23 percent you will pay the state on sports gambling winnings.

Many Indiana operators withhold 25 percent of taxable gambling winnings. Still, you might have to pay extra federal tax beyond the withheld amount. This applies to all casino games.

What are the Gambling Tax Rates in Indiana?

How much taxes do you pay on gambling winnings in Indiana? The state passed a law that states that all winnings received after 2017 and that are more than $5,000 have a 24 percent federal gambling tax rate.

Players should report winnings that are below $5,000 and state their sources. The state’s 3.23 percent personal income tax rate applies to most taxable gambling winnings.

The casino tax rates in Indiana are up to 25 percent if you show them your Social Security Number (SSN). Failure to which, they will withhold 28 percent of your winnings.

Unlike the income tax law, the gambling tax law in the state has a fixed tax rate on gambling winnings for cash prizes that are less than $5,000, provided you have an SSN. You can pay tax on non-cash prizes, including boats and vehicles, based on their market prices. Riverboat casino operators pay two gaming taxes: a supplemental wagering tax and a wagering tax.

Indiana passed the supplementary wagering tax in 2017, and it replaced the $3 admissions tax. The Hotel Riverboat Casino doesn’t pay it. Riverboat operators pay a wagering tax on their gross gaming receipts.

How to Claim and Report Indiana Gambling Winnings for Taxes

You need to report your annual taxable betting winnings on Form 1040. A bookmaker can tell you your W-2G threshold, and you’ll add the withheld tax to the total sum on your 1040.

Add the numbers in Box 1 of the W-2G, and calculate the total of Box 2’s numbers. Fill in the Box 1 total in line 21 and the Box 2 total on the “federal income tax withheld” line.

What to Do if You Don’t Receive a Form W-2G in Indiana

At times, an Indiana sportsbook operator can fail to give you the W-2G form. Even so, you need to report gambling winnings from your form 1040’s year.

Fill them in as “Other Income” on Schedule 1 and attach it to Form 1040. It will be part of your income tax return.

Indiana allows you to transfer the state income tax return from Line 7 to 1T-40’s Line 1. The IRS requires you to file the last year’s reporting by Jan. 31. The deadline is extended to the next business day if the date is on a weekend.

The postmark date shows that you filed your tax return on time. You can request a filing deadline extension in writing and address it to the Withholding Tax Section.

Can I Deduct My Losses?

The gambling tax calculator indicates that you can deduct gambling losses. But, you shouldn’t have deducted your tax return.

Your gambling losses will move to Line 28 of Schedule 1, Form 1040 if you itemize. The IRS prohibits you from claiming a deduction that exceeds your gambling winnings.

You need to prove the losses and cater for any expenses you incurred while betting, like meals and accommodation costs. Records such as canceled checks, credit card transaction records, bet tickets, profits or losses, the bet date and type, and the casino’s name can help you claim betting losses.

Casinos with rewards programs often issue members with an annual summary of their betting losses. It also applies to sports betting.

You cannot claim a federal tax return itemized deduction on your tax return. Punters who can claim losses on federal Schedule C get credit on their Indiana tax returns if the losses are added to the federal Adjusted Gross Income (AGI).

Indiana Lottery Taxes

The Indiana Department of Revenue requires you to report all your lottery winnings on Line 21 from the year indicated on Form 1040. The casino operator can send a W-2G showing the gambling tax they have withheld and your taxable winnings.

Include the sum on Box 1 on Form 1040, Line 21. You should not have reported the taxable income somewhere else.

What Happens if I Win the Lottery With a Group of People?

The taxes on winnings calculator shows the amount of tax you need to fill in Form 5754. It is appropriate for filing lottery winnings that you got as a group. Don’t include the form in the income tax return, as you will share winnings with other lottery ticket co-owners.

The person who got the W-2G form should receive the filled Form 5754 and submit the forms to the casino to record the transaction. Retain a copy of all records.

After a while, each player will receive a Form W-2G from the casino, and you will have to report individual winnings. The gambling winnings calculator will show the federal tax and state tax you should pay.

For example, the 2017 Tax Cut and Jobs Act requires casinos to withhold 37 percent of Powerball jackpots. It is prudent to consult a tax lawyer when you win a huge lottery.

Taxes on Multi-State Lotteries

Indiana requires all residents who win lotteries outside the state to report their winnings, including multi-state lotteries. You can reduce tax liability if you itemize your deductions. The state declared in 2003 that non-residents who win at Indiana establishments should pay state and federal taxes.

The IRS collects tax for winnings that are $1,200 or above and racetrack winnings that are over $599. For example, if you are an Indiana resident and win the lottery of over $2,500 in Illinois, you have to file a tax return in Indiana.

What Happens If I Don’t Report Gambling Winnings?

Not reporting gambling winnings is a crime in Indiana. You can get a penalty if you forget to claim your income. The sports gambling tax calculator shows the federal tax that you should pay to the IRS.

It requires all land and online gambling establishments to have records of all transactions. So, the revenue service gets a copy of your W-2G whenever you fill and submit it.

We recommend you always seek professional advice before submitting a return if you are unsure about anything.

Tax Calculator Gambling Winnings FAQs