Is Online Gambling Reported to the IRS? Quick Guide
- Yes, online gambling winnings are reported to the IRS and must be included in your gross income on your federal tax return. The IRS treats gambling income as taxable income just like wages, salaries, or tips, and you must report it even if you don’t receive a Form W-2G.
- When winnings exceed certain thresholds or if the payor withholds for federal tax, you may receive Form W-2G from the bookmaker or casino, which provides the amount won and the amount withheld. If you don’t get a W-2G, you still must report the winnings on the Form 1040, using the “Other income” line (or the appropriate line for the year’s form).
- You can deduct gambling losses only up to the amount of your winnings and only if you itemize deductions on Schedule A. This means losses aren’t a separate deduction and you cannot claim a net loss against other income; you must document detailed records of winnings and losses. Keep receipts, tickets, statements, and other records to substantiate your figures if you’re ever audited.
- The IRS provides guidance on gambling income and losses in Topic No. 419 and related Form W-2G instructions, which explain when a W-2G is required and how to report winnings and losses on your tax return. It’s important to review these resources to ensure you report accurately.
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