How to Claim Winnings from Slots to the IRS
Hitting the big jackpot on a slot machine is always the dream when you sit down to pull that handle, but when it does actually happen it is important to know how you need to handle it in terms of the taxes that you are responsible for paying on the amount that you win.
Understanding How you are Paid on a Slots Machine
In the event that you should hit a winning combination on a large jackpot, the machine will typically lock up. You may see lights located at the top of the machine begin to flash. Bells may also ring or music may begin to play. You may also see a message on the slot machine that alerts you to call the attendant. Typically, an electronic signal will also be sent to a monitoring room in the casino to let casino officials know that a player has hit a large jackpot. If the jackpot is under $5,000 the attendant will verify the win and collect your money for you. If the jackpot is larger than that amount it may be necessary for a technician to verify that the machine was working properly at the time of the hit. Players have the choice of taking a check or their winnings in cash. If the amount is very large then the casino will typically pay by check. On games such as MegaBucks or other games in which the jackpot could be a multi-million dollar win then the player will usually receive a partial payment and then have up to 90 days to determine whether they want to receive an annual annuity or a lump sum.
Understanding Taxes on Slot Machine Jackpot Winnings
It should be kept in mind that regardless of how you are paid all winnings from a casino are subject to taxes. The casino is only required to report winnings over $1,200 on slot machines. If you have a win that is equal to or less than $1,200 then you will receive a W-2G form from the casino. This form will contain your name, social security number and address. The casino will not hold out any tax on a jackpot that is less than $5,000 provided that the player provides their social security number. If a player does not provide their social security number then the casino will hold out 28% on small jackpots. Before paying out a jackpot the casino will request to see proper identification which includes a photo. All casinos can refuse to pay out jackpots if proper identification is not provided. If you do not have proper I.D. the casino may hold winnings until identification is provided.
Players may also choose to hold out a specific amount on any jackpots. This can be a way to avoid being responsible for large tax payments in April. Players may also legally deduct gambling losses up to the amount of their winnings, provided that they have documented their losses using a logbook or a diary.
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