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Columns: Tax Talk
George Saenz, CPA   Expert: George Saenz, CPA
Tax Talk
Type and amount of gambling winnings determine if they are reportable
Tax Talk

Are betting spoils taxable?

Dear Tax Talk:
I go to the casinos around my area and play a variety of games. On some winnings I get a 1099 and on others of the same amount I don't. Don't they have to give me a 1099 when I win more than $600?
-- Bob

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Dear Bob,
The chances of getting a 1099 depend on the amount and the odds of your wager. In a pari-mutuel or lottery setting, the general rule is that to be reportable on Form W-2G the payout has to be 1) $600 or more and 2) 300 times more than the wager.

In a casino setting, the rules differ. These requirements do not apply to winnings from bingo, keno and slot machines.

In bingo and keno, game winnings are aggregated; in slots they are not, for obvious reasons. For example, if you have $1,000 in credits on a $1 slot machine and you hit a spin for a $1,200 or more payout, only the one win is reportable. The existing credits are not aggregated to determine the reportable winnings, as there is no determination as to the number of bets.

When these gambling winnings are reportable:
The winnings (reduced by the wager) are $1,500 or more from a keno game.
The winnings (not reduced by the wager) are $1,200 or more from a bingo game or slot machine.

If you play table games, for the most part your winnings are not reportable.

Generally, no tax is required to be withheld unless the winnings exceed $5,000. If the winnings exceed $5,000, then 25 percent can be withheld from the entire amount for income taxes.

Form 1099 is used to report prizes and awards, such as winnings from TV shows. The $600 threshold also applies for these types of winnings.

Bankrate.com's corrections policy -- Posted: Jan. 17, 2008
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