1. Ohio Tax On Casino Winnings Calculator
2. Ohio Tax On Casino Winnings Online
3. Casino Tax On Winnings
4. Casino Winnings On Tax Return
5. Ohio State Tax On Gambling Winnings

Therefore, please contact your nearest Ohio Lottery office to obtain the actual prize award amounts. Current tax withholding rates: (Tax rates are subject to change.) Federal - 24% State - 4%. Jack Thistledown Racino. Along with the other six Racinos, this is an Ohio Lottery Cashing Location, for all prizes up to $5,000.

Do you like to gamble? If so, then you should know that the taxman beats the odds every time you do. The Internal Revenue Service and many states consider any money you win in the casino as taxable income. This applies to all types of casual gambling – from roulette and poker tournaments to slots, bingo and even fantasy football. In some cases, the casino will withhold a percentage of your winnings for taxes before it pays you at the rate of 24 percent.

Casino Winnings Are Not Tax-Free

Casino winnings count as gambling income and gambling income is always taxed at the federal level. That includes cash from slot machines, poker tournaments, baccarat, roulette, keno, bingo, raffles, lotteries and horse racing. If you win a non-cash prize like a car or a vacation, you pay taxes on the fair market value of the item you win.

By law, you must report all your winnings on your federal income tax return – and all means all. Whether you win five bucks on the slots or five million on the poker tables, you are technically required to report it. Job income plus gambling income plus other income equals the total income on your tax return. Subtract the deductions, and you'll pay taxes on the resulting figure at your standard income tax rate.

How Much You Win Matters

While you're required to report every last dollar of winnings, the casino will only get involved when your winnings hit certain thresholds for income reporting:

• $5,000 (reduced by the wager or buy-in) from a poker tournament, sweepstakes, jai alai, lotteries and wagering pools.
  
• $1,500 (reduced by the wager) in keno winnings.
  
• $1,200 (not reduced by the wager) from slot machines or bingo
  
• $600 (reduced by the wager at the casino's discretion) for all other types of winnings but only if the payout is at least 300 times your wager.
  

Win at or above these amounts, and the casino will send you IRS Form W2-G to report the full amount won and the amount of tax withholding if any. You will need this form to prepare your tax return.

Understand that you must report all gambling winnings to the IRS, not just those listed above. It just means that you don't have to fill out Form W2-G for other winnings. Income from table games, such as craps, roulette, blackjack and baccarat, do not require a WG-2, for example, regardless of the amount won. It's not clear why the IRS has differentiated it this way, but those are the rules. However, you still have to report the income from these games.

What is the Federal Gambling Tax Rate?

Standard federal tax withholding applies to winnings of $5,000 or more from:

• Wagering pools (this does not include poker tournaments).
  
• Lotteries.
  
• Sweepstakes.
  
• Other gambling transactions where the winnings are at least 300 times the amount wagered.
  

If you win above the threshold from these types of games, the casino automatically withholds 24 percent of your winnings for the IRS before it pays you. If you cannot provide a Social Security number, the casino will make a 'backup withholding.' 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 directly to the IRS and credited against your final tax bill. Before December 31, 2017, the standard withholding rate was 25 percent and the backup rate was 28 percent.

The $5,000 threshold applies to net winnings, meaning you deduct the amount of your wager or buy-in. For example, if you won $5,500 on the poker tables but had to buy in to the game for $1,000, then you would not be subject to the minimum withholding threshold.

It's important to understand that withholding is an entirely separate requirement from reporting the winning on Form WG-2. Just because your gambling winning is reported on Form WG-2 does not automatically require a withholding for federal income taxes.

Can You Deduct Gambling Losses?

If you itemize your deductions on Schedule A, then you can also deduct gambling losses but only up to the amount of the winnings shown on your tax return. So, if you won $5,000 on the blackjack table, you could only deduct $5,000 worth of losing bets, not the $6,000 you actually lost on gambling wagers during the tax year. And you cannot carry your losses from year to year.

The IRS recommends that you keep a gambling log or spreadsheet showing all your wins and losses. The log should contain the date of the gambling activity, type of activity, name and address of the casino, amount of winnings and losses, and the names of other people there with you as part of the wagering pool. Be sure to keep all tickets, receipts and statements if you're going to claim gambling losses as the IRS may call for evidence in support of your claim.

What About State Withholding Tax on Gambling Winnings?

There are good states for gamblers and bad states for gamblers. If you're going to 'lose the shirt off your back,' you might as well do it in a 'good' gambling state like Nevada, which has no state tax on gambling winnings. The 'bad' states tax your gambling winnings either as a flat percentage of the amount won or by ramping up the percentage owed depending on how much you won.

Each state has different rules. In Maryland, for example, you must report winnings between $500 and $5,000 within 60 days and pay state income taxes within that time frame; you report winnings under $500 on your annual state tax return and winnings over $5,000 are subject to withholding by the casino due to state taxes. Personal tax rates begin at 2 percent and increase to a maximum of 5.75 percent in 2018. In Iowa, there's an automatic 5 percent withholding for state income tax purposes whenever federal taxes are withheld.

State taxes are due in the state you won the income and different rules may apply to players from out of state. The casino should be clued in on the state's withholding laws. Speak to them if you're not clear why the payout is less than you expect.

How to Report Taxes on Casino Winnings

You should receive all of your W2-Gs by January 31 and you'll need these forms to complete your federal and state tax returns. Boxes 1, 4 and 15 are the most important as these show your taxable gambling winnings, federal income taxes withheld and state income taxes withheld, respectively.

You must report the amount specified in Box 1, as well as other gambling income not reported on a W2-G, on the 'other income' line of your IRS Form 1040. This form is being replaced with a simpler form for the 2019 tax season but the reporting requirement remains the same. If your winnings are subject to withholding, you should report the amount in the 'payment' section of your return.

Ohio Tax On Casino Winnings Calculator

Different rules apply to professional gamblers who gamble full time to earn a livelihood. As a pro gambler, your winnings will be subject to self-employment tax after offsetting gambling losses and after other allowable expenses.

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About the Author

Jayne Thompson earned an LLB in Law and Business Administration from the University of Birmingham and an LLM in International Law from the University of East London. She practiced in various “big law” firms before launching a career as a commercial writer. Her work has appeared on numerous financial blogs including Wealth Soup and Synchrony. Find her at www.whiterosecopywriting.com.

Just as the Powerball jackpot keeps growing, so does the share the taxman will take if you're lucky enough to win. All lottery winnings are subject to federal income taxes and most states charge state taxes, which could range from 2.9 percent to 8.82 percent, depending on where you live. Ohio isn't the worst state to win the lottery in, but it isn't the best either. Residents can expect to hand over 4 percent of their cash pile to the state government. The state also permits local tax authorities, such as cities and villages, to tax lottery winnings as ordinary income.

Winning Lotto Results and the IRS

When you win a large sum on the lottery, the state will give you the option of taking all the money as a series of regular payments made over 30 years, or taking a slightly smaller (though possibly still enormous) one-time lump sum check. Whichever method you choose, anything above $600 is subject to federal income taxes. You pay the taxes in the year you receive the payment.

Your final tax bill will vary depending on your personal situation. Generally, you can expect a big win to push you into the top tax bracket, which is 37 percent in 2018. An annual annuity payment of, say $150,000 per year, would be taxed at the much lower rate of 24 percent if you file single and 22 percent if you're married filing joint. But the annuity payout may still push you into a higher federal tax bracket than you are usually in. And these rates do not include the state and local taxes you could face in various municipalities.

Ohio Tax On Casino Winnings Online

Ohio's Slice of Classic Lotto Payout

After federal taxes are deducted, there are state taxes to think about. These vary based on where you buy the winning ticket. Purchase the ticket in Ohio, and you will pay 4 percent of the winnings in state taxes. While slightly less painful than the federal tax bill, you'd still be losing $400,000 in Ohio state taxes on a $10 million lottery win – together, the federal and state tax bill would slice 41 percent off your lotto check. The rate is the same regardless of whether you live in Ohio or out of state.

Winners in other states could walk away with a much bigger share of the jackpot. Nine states, along with Puerto Rico, don't charge any state taxes on lottery winnings: Florida, California, New Hampshire, Delaware, South Dakota, Texas, Washington, Tennessee and Wyoming. The worst states to win the lottery in are New York and Maryland, with state tax rates of 8.82 percent and 8.75 percent respectively.

Casino Tax On Winnings

Local Taxes on Lotto Results

The state of Ohio also permits municipalities, such as cities or counties, to tax lottery winnings, although not all of them do. The cities of Dayton, Akron and Chillicothe have all chosen to tax lottery winnings, for example, with municipal tax rates typically sitting in the region of 2.25 to 2.5 percent.

In order for municipalities to collect the tax, they must specifically declare that lottery winnings are taxable income in their city charters. You should check with the city to see if lottery winnings are taxed and take care of any reporting requirements.

Federal and State Tax Withholding

Win $10 million on the lottery, and it's likely that your publicity-friendly cardboard check will be made out for the sweet sum of $10 million. But the actual paper check – the one your bank will accept – will show a smaller figure. That's because the state must deduct 25 percent of the headline win for federal tax withholding. Strike it rich to the tune of $10 million, and you'll receive a check for (only) $7.5 million on account of the tax withholding. If you don't have a Social Security number or you're a foreign citizen, the tax withholding increases to 28 percent and 30 percent respectively. Federal tax withholding kicks in at $5,000 of winnings, according to IRS rules.

Ohio state revenue collectors will also withhold their 4 percent cut. When combined with the federal tax withholding, that reduces the cardboard check by a total of $2.9 million. The withholding is passed to the IRS and the Ohio state tax department respectively and credited toward your final tax bill. When tax time rolls around, you'll have to pay the rest of the taxes you owe.

Here's something else to watch out for – the lottery will get in touch with child support and other agencies to make sure you don't owe child support, student loans or back taxes before writing your check. If you do, those debts will automatically be subtracted from your win before you receive your check.

Moving Out of State

For lottery tax purposes, it doesn't matter which state you live in. State taxes are based on where the lottery ticket was purchased, not where you reside. If you buy the winning ticket in Ohio, you have to file an Ohio state tax return and pay Ohio's 4 percent lottery taxes on the payout irrespective of where you live. Moving out of state does not reduce your tax liability.

Ohio Classic Lotto Gift Tax

If you give away more than $15,000 to anyone other than your spouse in the same calendar year, you'll need to file IRS Form 709 every time you make a gift. This form acts as a disclosure to the IRS and allows the tax authorities to monitor how much money you're giving away over your lifetime. Currently, you're allowed to transfer property up to $11.18 million either during lifetime or at death without paying any federal gift taxes. Whenever you report a gift, the gift amount is applied against your exemption. It's only when gifts exceed the exclusion sum of $11.18 million that taxes accrue.

What this means is that any amount you gift during your lifetime will reduce the amount available at death for tax-free transfer. Suppose, for example, that you generously give away $5 million of your big lottery win to friends and relatives. The remaining exemption that your estate could claim at death would be $6.18 million ($11.18 million exemption less the $5 million lifetime gift). If your estate is larger than that, the excess will be subject to a flat estate tax rate of 40 percent. The good news is that with the exemption currently set so high, most people don't have to worry about federal gift or estate taxes, anyway.

Some states impose gift and inheritance taxes but Ohio does not. This means that Ohio residents don't have to worry about making gift transfers during their lifetimes, although federal gift and estate taxes still apply.

Lottery Tax Nonpayment

Tax avoidance is a federal crime and obviously you don't want to go down that path. There may be some tax breaks available to people who make large donations to charity, and their final tax bill may look quite different to someone who blows the money on cars, boats and lavish vacations.

Casino Winnings On Tax Return

If you're planning to share your winnings, you may be able to avoid gift and estate taxes by legally sharing the ownership of the ticket. Signing an agreement that makes all the intended recipients legal co-owners of the ticket means the winnings will be taxed as if each recipient owned the money as part of their income rather than a gift for those co-owners. Since it's the donor and not the recipient who pays gift taxes, this could save you a lot of money.

If you win big, it's critical that you find some professional tax advice for help on how to reduce the tax blow. The rules are complex and you could lose out if you try to navigate them on your own.

Ohio State Tax On Gambling Winnings

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About the Author

Jayne Thompson earned an LLB in Law and Business Administration from the University of Birmingham and an LLM in International Law from the University of East London. She practiced in various “big law” firms before launching a career as a commercial writer. Her work has appeared on numerous financial blogs including Wealth Soup and Synchrony. Find her at www.whiterosecopywriting.com.