Indiana Tax Rate On Gambling Winnings
*We are not tax experts and this article should not be construed as tax advice. Always seek the help of a professional for tax-related questions.
Many people participate in sports betting in one way or another each year, even if they only place a wager on a single event like the Super Bowl. Casual bettors who might only visit a sportsbook once or twice a year are often unaware that sports betting winnings can be sent in as taxable income. Of the ones who do know, many of them do not meet the requirements or simply choose to ignore the law.
What Gets Tracked and Reported?
- A backup withholding is also applied at the rate of 24 percent, only now it includes all your gambling winnings from slot machines, keno, bingo, poker tournaments and more. This money gets passed.
- Your total federal income taxes are estimated at $11,000 per year or $220,000 after 20 years since we're assuming the tax rate for this example won't change. You have saved $150,000 over the 20.
- Find Indiana tax forms. Know when I will receive my tax refund. File my taxes as an Indiana resident while I am in the military, but my spouse is not an Indiana resident. Take the renter's deduction. Pay my tax bill in installments. Claim a gambling loss on my Indiana return. Have more time to file my taxes and I think I will owe the Department.
Gambling winnings, just like any other income, are taxed in the United States. If you raked in gold last year for sports betting, keep reading. In this post, we discuss everything you need to know about paying tax on sports betting.
You can walk into just about any of the sportsbooks in Nevada, place a wager of $50 or $5,000 on a game, win and cash in your ticket – all without providing the sportsbook with any of your personal information. On top of this, all wagers and winnings are transacted using cash, so nobody would know that you even placed a bet (never mind won it).
For those reasons, most live sports betting winnings go unnoticed and some people don’t report their winnings to the government. A lot of sports bettors feel that the IRS simply doesn’t have time to try and hunt down every last penny that ends up in somebody’s pocket.
What is Considered Taxable Income?
Winnings from sports wagers are considered to be taxable income if you win $600 or more and the win was 300 times more than the amount wagered. If this happens, then taxes should be automatically withheld by whoever you placed the bet with. Since the odds must be 300-1 or better this is primarily applied only to winning lotteries, sweepstakes, and other places that allow small wagers like the racetrack.
The sportsbooks do not automatically hand you a form every time you clear yourself $600 on a game because very few bets pay at least 300-1 and they have no idea know how much you may already be down that day. The same goes for table games like blackjack, craps, all games that involve spinning a wheel, etc. The results are not tracked, which means paying the taxes is your responsibility.
If you are cashing in a huge sports betting ticket, some prefer to be paid in chips instead of cash. If you are not a local to the casino you won at and have to fly with a ton of cash, the casino can fill out a form for you called a CTR explaining how you got the money but you are not required to pay taxes right then and there.
Most of the time, people lose on sports betting anyway, so hardly anybody has to think about this. Of the few that do win, a lot of them probably aren’t winning very much which makes it very easy for them to keep going without reporting. The question is: if you are pulling in big figures from sports betting, what should you do with the money?
You can put it in the bank, but if you have a job that you pay taxes on, you may have some difficulty explaining to the IRS where you came up with, say an extra $50,000 that you gradually put away that year. Some bettors keep the cash somewhere off the books so there is no paper trail, but there are obvious inherent risks with that as well.
Where is Sports Betting Legal?
In 1992 the Professional and Amateur Sports Protection Act (PASPA) was passed. It pertained to betting on sports in the United States, and banned it in all states except Nevada, Delaware, Montana, and Oregon. Oregon and Montana are not currently active in handling sports wagering.
Nevada, far and away the most flexible state to bet sports on allows you to bet on all kinds of things on all kinds of sports. Delaware is looking to expand its sports betting privileges but for the time being only allows parlay bets on NFL games.
Online sports betting is considered illegal. Since the sites are based offshore this ends up being the loophole. If you earn winnings from an online site you are still required to report it as income, even if they are obtained illegally and/or from another country. If you aren’t a professional gambler, you will want to claim these winnings as “other income”.
Writing off Losses
People are allowed to gamble with the purpose of making a living off their profits and claim that on their taxes. If you claim to be a poker player and won $50,000 that year but lost $10,000 along the way on betting sports, the wise thing to do would be to keep all your losing tickets. This will prove you made the bets and lost the money, enabling you to deduct it from your taxable income.
If someone mistakenly loses a winning ticket and you find it before they have a chance to explore any possible recovery options, it’s the same as finding money on the floor. You can cash it in. The only exception to this is if the bet was tracked on the bettor’s player’s card which is something anyone can get with an ID. The player’s card is scanned once you make the bet assigning an identity to what bet you made and when. This is the only way you can have casino sportsbooks track your action and have a record of your winnings.
Deducting losses for non-professional gamblers are not very satisfying for a couple of reasons. First, your losses are only deductible as “other miscellaneous itemized deductions”. In other words, if your deductions are not greater than the standard deduction, you will not receive any tax breaks for it.
In addition, you can only deduct as many losses as you have won. If you have $25,000 in winnings and $100,000 in losses, you can only deduct $25,000 giving you a net sports betting income of $0, not -$75,000. This is why it’s important to diligently track everything you won and lost including details of time and place. Losses are easy to prove since you can keep the ticket but if you win the sportsbook keeps it. The best thing to do is write everything down in a journal. Wins or losses.
*We are not tax experts and this article should not be construed as tax advice. Always seek the help of a professional for tax-related questions.
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(b) In addition to amounts withheld under subsection (a), every person engaged in a gambling operation (as defined in IC 4-33-2-10) or a gambling game (as defined in IC 4-35-2-5) and making a payment in the course of the gambling operation (as defined in IC 4-33-2-10) or a gambling game (as defined in IC 4-35-2-5) of:
Terms Used In Indiana Code 6-3-4-8.2
- adjusted gross income: shall mean the following:
(a) In the case of all individuals, 'adjusted gross income' (as defined in Section 62 of the Internal Revenue Code), modified as follows:
Indiana Code 6-3-1-3.5
- Month: means a calendar month, unless otherwise expressed. See Indiana Code 1-1-4-5
(2) winnings (reduced by the wager) valued at one thousand five hundred dollars ($1,500) or more from a keno game;
shall deduct and retain adjusted gross income tax at the time and in the amount described in withholding instructions issued by the department. The department’s instructions must provide that amounts withheld shall be paid to the department on the twenty-fourth calendar day of each month. Any taxes collected during the month but after the day on which the taxes are required to be paid shall be paid to the department at the same time the following month’s taxes are due. Slot machine and keno winnings from a gambling operation (as defined in IC 4-33-2-10) or a gambling game (as defined in IC 4-35-2-5) that are reportable for federal income tax purposes shall be treated as subject to withholding under this section, even if federal tax withholding is not required.
Indiana Tax Rate On Gambling Winnings 2018
(c) The adjusted gross income tax due on prize money or prizes:
Indiana Tax Rate On Gambling Winnings Tax
(1) received from a winning lottery ticket purchased under IC 4-30; and
(2) exceeding one thousand two hundred dollars ($1,200) in value;
Indiana Tax Rate On Gambling Winnings 2020
shall be deducted and retained at the time and in the amount described in withholding instructions issued by the department, even if federal withholding is not required.
Indiana Tax Rate On Gambling Winnings Calculator
(d) In addition to the amounts withheld under subsection (a), a qualified organization (as defined in IC 4-32.3-2-31(a)) that awards a prize under IC 4-32.3 exceeding one thousand two hundred dollars ($1,200) in value shall deduct and retain adjusted gross income tax at the time and in the amount described in withholding instructions issued by the department. The department’s instructions must provide that amounts withheld shall be paid to the department before the close of the business day following the day the winnings are paid, actually or constructively.
As added by P.L.28-1997, SEC.16. Amended by P.L.192-2002(ss), SEC.82; P.L.91-2006, SEC.8; P.L.182-2009(ss), SEC.200; P.L.212-2018(ss), SEC.24; P.L.58-2019, SEC.22.