Gambling is probably the best way to ease the mind and relax by doing something interesting and entertaining. That level of excitement and adrenaline rush that comes while waiting for the ball to stop on the number you have placed your bet on or while waiting for the dealer to show the next card in poker is something that cannot be compared to any different activity. Of course, everything got to a whole new level with the Internet, as today, you can enjoy playing games of chance regardless of where you are. On the other hand, finding a reliable site has never been more challenging because there are just too many websites to choose from, and also, there are many aspects to keep in mind when picking the site.
How to find a reliable website?
The first thing to check is whether it is a scam or not, and once you are sure that the site is legit, odds, bonuses, the offer of games, RTP ratio, and how long the withdrawal process is, are just some of the essential things to check. All of this is much easier for those who already have some experience, as they already know their way around this, but there is something that troubles even them, and yes, we are talking about taxes. Namely, taxes can play a huge role here, and if you have lady luck by your side and win big, it’s good to know whether and how big of a tax you need to pay for those winnings.
How big is the tax rate?
The tax rate differs as every country has its own, but if you are living in the US, it gets even more difficult to keep track of it, as every state has its own rules and policies. Namely, in most cases, any gambling income is a taxable income, meaning that you need to pay taxes for it, but there are also exceptions, meaning that if certain criteria are met, there is no need to pay taxes for gambling income. Yes, this might seem confusing at first, but that is why we gathered some facts and tips on how to properly report your winnings so that you would really get the best possible gambling experience.
What are gambling winnings?
First of all, we need to explain what gambling winnings are since many people are still confused about them and easily forget about some of them because they are not sure whether they are considered gambling winnings or not. They can be paid in money, like the ones we get in a casino, bookmaker, or when playing slots, and we can get cash or use our credit cards to transfer them to our bank accounts and use them just like our own money.
On the other hand, we also have so-called non-cash winnings, such as a bicycle won in a lottery, or even something bigger, such as an exclusive cruise or apartment, and many people forget that it is necessary to check their market value and treat them just like cash winnings. No matter whether we are speaking about cash or non-cash winnings, both of them need to be found on our tax reports, and because of that, we need to be careful when listing them.
What about losses?
Since we are in obligation to report our winnings on our tax reports, we can also report our losses for the deduction, but we need to follow the procedure. Each loss needs to be documented, so our gambling can be verified, or the loss we report will not be valid. In order to do that, we need to be responsible and create our own gambling diary that will contain all our winnings and losses, so we can easily check them every time we need them.
Writing a diary will not help us only when it comes to taxation since it is also a great way to check our gambling activity and know exactly how much money we have spent or won. In that way, we can see when it is time to stop and relax for a while, and avoid all the gambling problems such as addiction, borrowing money for gambling, and much more.
Different rules for professionals
Most people enter a casino or bookmaker just for fun to fulfill their free time and try to win money, but some of them have made a career out of it. They are considered professional gamblers, as gambling is something they do for a living instead of a regular job. As we have already mentioned, each winning is taxable and needs to be found on our tax reports, but how it all works for professionals since it is almost impossible for them to keep records of each winning and report each of them separately?
Well, since it is their main occupation, it is considered their job, and they need to fill in another form when it comes to taxation, the same one that people with regular jobs do. However, they also have an obligation to fill out the tax report, and when it comes to that, the rules are the same for everybody, with slight differences when it comes to the form that needs to be filled out. All in all, this shouldn’t be something that troubles casual players, but it’s good to know which forms you need to file if you want to become a professional player.
We have already mentioned that there are certain exceptions, and it’s mostly about the categorization of certain games. Namely, playing craps or blackjack is considered a game of skill rather than games of chance, meaning that casinos are not required to withhold taxes or issue a W2-G to players. On the other hand, there is also an exception for slot machines, even though they are considered games of chance, but in general, you should keep good track of your winnings and losses as it is the only way to avoid any legal trouble. Slots are rightfully the most popular casino game, and the only thing to keep in mind here is picking the best and most interesting ones, and at Mystino Blog, you can find more info on that.