Do You Have To Pay Tax On Gambling Winnings Nz

Gambling is fun. Unfortunately, the two have to go together for anything to happen. The truth of the matter is that for states like Michigan, the only real reason to legalize any form of gambling is the opportunity for tax revenue.Whether it be to pay for schools, roads, or some other unspecified project, most governments are always on the lookout for a new revenue stream. If you’re based in the UK, Europe, Oceania and Canada, then no, you likely will not have to pay any tax on your online gambling winnings. In the US, you must declare your gambling winnings on your tax return each year. These countries have no online gambling tax: Taxback.com have got your back! Do you have to pay taxes on the money you win gambling online? Again, the blunt answer is yes. Since the federal government, and many state governments for that matter, deem winnings from lotteries or gambling to be more than just good fortune. They are income that you generated by actively trying to obtain that money.

Disclaimer: OnlineUnitedStatesCasinos does not provide tax, legal or accounting advice. We encourage those who are making important decisions on their online gambling taxes to consult with their own certified tax professional before filing with the IRS.

Are online gambling winnings taxable? Yes, whether you gamble at land-based or online casinos, the money you earn is subject to federal income tax. Known as gambling income, the money you earn from wagers and bets as well as lotteries, sweepstakes, etc. all must be taxed.

In some cases, you will be provided with tax forms that must be turned in to the federal government. The full amount of the gambling income minus the cost of the winning bet will be included on this form. Whether you receive this form or not, it’s important to know your responsibilities when it comes to filing income taxes.

The process of handling gambling taxes is not difficult if you know what to do. With this in mind, the OUSC team created this quicktax guide to help US players report their online gambling income.

Do US Players Have To Pay Taxes For Online Gambling?

So, if you enjoy online gambling at sites like BetOnline or Bovada Casino, do you have to pay taxes? When you choose to gamble online, the money you earn is still taxable. Even if the site is located in another country, you still have to pay taxes.

Online gambling is unregulated in most regions of the US, but taxes must still be paid. Just because you do not receive tax forms, does not mean that your winnings are not taxed.

To the IRS, it does not matter where the money is either. If you have funds in your online casino account, even if it’s an offshore site, it’s taxable. When dealing with online gambling earnings, it’s important to review this information with an accountant to ensure you pay the right amount of taxes owed.

Below you will find a list of gambling activities that the International Revenue Service considers taxable:

  • Prizes
  • Private Party Games
  • Tournaments
  • Scratch Off Tickets
  • Other

How Do You Report Gambling Winnings?

The way you report your gambling activities will be dependent on how you win. If you receive a Form W-2G, then this is what you will turn in when filing taxes. Taxes must be filed before April 15th or you must ask for an extension. You will turn this form in as you do your other tax forms for employment to an accountant or tax filing company.

If you do not receive the W-2G form, then you will need to fill out a Form 1040, adding the winnings to Line 21 of the form. The full amount of gambling winnings will be placed on this line.

When filling out the 1040, you will need to configure your losses as well. The expense you had for bets, wagers, etc. will need to be deducted as an itemized deduction. This is done on the “Other Miscellaneous Deductions” line of Schedule A form. This will help to lower the tax amount paid on your total gambling income.

What Types of Records Do You Need?

The information you record while enjoying online gambling can be used during the filing process. It’s important to maintain a log or diary of all your losses and winnings. Keep in mind the following information:

  • Dates: You will need to record the date and type of activity completed, including wagers and winnings.
  • Location: List the name and location of the gambling facility. In the case of online gambling, this would be the website, such as MyBookie or Café Casino.
  • Checks: If you are sent any checks in the mail from winnings, be sure to keep the check stub.
  • Paperwork: For some players, winnings will be sent via mail and any paperwork should be kept and used during filing as needed.

Don’t Forget To Pay Your Online Gambling Taxes

When you gamble online, it is important to enjoy yourself, but also remember to file your winnings! The IRS takes gambling money very seriously and you want to be sure that you pay your taxes accordingly. If you need any additional information, be sure to visit the official website of the IRS to find all the previously mentioned forms you will need fo file your taxes.

We’ve already answered the question of whether or not you have to pay tax on your gambling winnings so if that’s the question you’re asking, check out our other tax entry in our FAQ section. If you just want a short answer, then it is “no” – assuming you live in the UK.

However, even though you don’t have to pay tax on the profit of your winning bets, the more tax savvy, or perhaps taxman-wary, punters out there, may still be questioning whether or not they would still have to declare profit from winners to the tax man.

Again, thankfully, the answer is a simple no (as far as we’re aware). Gambling is not listed by HMRC as a taxable trade, there is no tax due and any income derived from such activities is of no concern to them, meaning there is no need to declare it.

Do you have to pay tax on gambling winnings nz winnings

Keeping Records

Do You Have To Pay Tax On Gambling Winnings Nz Losses

Do you have to pay tax on gambling winnings nz cash

Having said all this, you may want to keep records of your wins (especially larger ones) in case you are ever investigated as you may need to prove where this extra unearned money has come from – if Joe the postman suddenly starts driving a Ferrari, chances are the tax man might pop his head up and have a poke around just to make sure things are on the up-and-up.

Do You Have To Pay Tax On Gambling Winnings Nz Cash

If only all questions relating to tax were so easy to answer!

Tax on Bank Interest

Although any winnings gained from gambling be it online, in a high street bookmaker or in a casino, are exempt from tax in the UK, you may be in a situation where some interest earned on those winnings whilst they are in a bank account, savings account, trust fund or bond will be taxable.

Do You Have To Pay Tax On Gambling Winnings Nz Winnings

Currently, the UK government allow basic rate tax payers to earn up to £1000 in interest during the tax year before being required to pay tax on this interest. This amount reduces to £500 for higher rate tax payers. So, if you have significant winnings held in accounts that aren’t tax free, such as ISAs and certain National Savings accounts, you could be required to pay tax on the interest accrued.