how much tax on gambling winnings

How Much Tax on Gambling Winnings? The IRS Wants Its CutLets face it, we all dream of hitting the jackpot. But the thrill of winning can quickly turn sour when you realize the taxman wants a piece of the action. So, how much tax do you have to pay on gambling winnings? The short answer is: it depends. The IRS considers gambling winnings as taxable income, and youll need to report it on your tax return. The tax rate depends on your overall income and is based on the tax brackets for your filing status. Heres a breakdown: No matter how big or small the win, youre generally required to report it. Gambling winnings are taxed at your ordinary income tax rate, which can range from 10 to 37. You can deduct gambling losses, but only up to the amount of your winnings. Keep accurate records of both your winnings and losses, as youll need them to file your taxes. Its important to note that some states also impose their own taxes on gambling winnings. Be sure to check your states regulations to see if there are any additional taxes you need to pay.Dont let the taxman spoil your winning streak! Knowing the rules and keeping good records can help you keep more of your winnings.