Contents

I do not live in Louisiana. How do I obtain a refund for taxes withheld from gambling winnings in Louisiana? Top of page Sales Tax. To what transactions is sales tax applied? What is the sales tax rate in Louisiana? Are there any exemptions from the sales tax? I am a wholesaler, selling only to other dealers for resale. Request an Individual Income Tax Return Booklet to be mailed to your home address. Mailed booklets are identical to the PDF version (Option 2). You will need to mail your finished return to the department. Processing time for paper returns will be 12-14 weeks from the date the return was mailed.

Gambling Winnings Subject to Tax?

With all sports betting, casino, poker, daily fantasy, and state lotteries, is the government entitled to a fair share? The most accurate answer is, you can bet on it. While that fair share might cause you to grumble under your breath, the fact is gambling winnings are taxed.

Now, you might wonder if you can use your losses at the table or on the ballgame as a write-off. Here is a detailed guide that addresses all your questions about taxes on gambling. We’ll discuss how winnings are taxed, some state and federal requirements, plus which forms you need to use to report gambling income.

How Are Gambling Winnings Taxed

Answering the question about how gambling winnings are taxed involves looking at different situations. Of course, the guidelines for the federal income tax process are standard across the country.

States have various tax structures, so you need to inquire about those for the state in which you file your state taxes. Here is an overview of both federal and state guidelines for how gambling winnings are taxed.

The first thing to know is the difference in how you generated your winnings. If you win over $600 at the horse track, $1,200 on a slot machine or in a bingo game, $1,500at keno, or $5,000 or more at a poker table, you must report these winning to Uncle Sam.

For this reason, most tracks and casinos require your Social Security number before you’re paid out on any big cash win. You also must complete an IRS Form W2-G, and report the amount you won on this form.

You might immediately think this is all overkill because, in most instances, a casino is going to deduct 25% before they pay out your winnings. You’ll get a receipt, of course, since these monies will be earmarked for the US Government Treasury.

Now, what if you win an amount of money gambling that is less than those previously listed? According to the IRS, you are legally obligated to report these winnings as income on your federal taxes.

To be on the safe side, always report the money you win gambling, whether it’s on a horse, a puppy, a spill out from a slot machine, or big pot when you’re holding a royal flush. Gambling income is taxed federally.

Many states with an income tax will also require you to report winnings, especially those where casinos and sportsbooks are becoming legal. Of special note, the only state for years where casino gambling was legal, Nevada, did not tax gambling income. Check with your state to determine whether you need to report your winnings.

There are often questions about how any money you win gambling online can be taxed. Online gambling taxes do have a few gray areas. Many of the current gambling venues are striving to offer online sportsbooks, so this type of gambling and how taxes apply is important.

What the IRS does is specify what is taxable and what is non-taxable income. In the world of daily fantasy sports, there are players who essentially earn their living by playing DFS contests. In these instances, you should take precautionary steps when it comes to taxes and your winnings.

Same concept will apply if you are in a state that eventually allows online sports betting through a sportsbook. IRS Publication 525 explains in detail what constitutes taxable and what is deemed non-taxable income.

Gambling Winnings will rarely fall under the category of non-taxable, so be prepared to treat online winnings from any type of gambling in the same manner you handle any money you win at a physical casino or sportsbook.

But, How Will They Know I Won?

One of the huge motivating factors behind states’ eagerness to legalize sports betting is the lucrative potential of such operations. Every state that allows casino gambling, or promotes a statewide lottery, has these same financial aspirations.

To risk that the IRS or state government won’t find out about your gambling profits is taking a gamble bigger than the risk you take to bet in the first place. Obviously, the state is going to know about every ticket that wins in their own lottery. Be confident that the federal government is going to get word of those winners as well.

When it comes to gambling, each state has some form of a gaming commission that oversees all operations. One of the stipulations to get a licensed casino is that all winners will be reported. To think that you might somehow circumvent this reporting process is naive.

If you do ignore gambling winnings when filing your taxes, you could be pursued for tax evasion. The consequences of being found guilty of tax evasion for failure to report gambling or lottery winnings is the same as if you attempted to evade paying taxes on any other earned income.

Report your winnings, because you won’t like the consequences of not reporting them. Casual gamblers can get by with a few receipts. One disadvantage of keeping limited records will befall you if you get lucky and win big.

Without strong receipts for previous losses, you will be unable to document these as deductions to offset the taxes leveled against your winnings. For anyone who takes pleasure in gambling frequently, keep your receipts and maintain at least a basic ledger of your gambling activity.

You don’t need to account for every nickel pumped into every slot machine, but documentation of total wins and losses will prove helpful when submitting your tax documents. Here are two of the basic IRS forms used to report winnings from gambling, including the standard personal income tax form.

• U.S. Individual Tax Return 1040
• IRS Form W-G2 Certain Gambling Winnings

Maintaining good records of your gambling activity will allow you to itemize your losses and deduct them from your final tax bill. However, you can also apply the same tax withholding structure for your gambling winnings that you apply to other types of income.

The income tax rate is 24% on all types of gambling profits, but there are certain sources of these winnings that are automatically subject to withholding tax. Follow the IRS guidelines to have a preset percentage taken out of your winnings.

This will not only help you avoid mistakes due to lapse in memory but can also eliminate being hit with a huge tax number at the end of the year. Here are some more frequently asked questions about gambling winnings and paying taxes on them.

Frequently Asked Questions About Gambling Winnings and Taxes

Here are some frequently asked questions in relation to gambling winnings and taxes.

1. Are you required to pay taxes if you win gambling at a physical casino?

The short answer is yes. A lengthier explanation simply involves the previous example discussed in how gambling winners are taxed. The law specifies that you must report all income from gambling games of all types.

While the guidelines on when that income becomes taxable are different for various games, the rules read that you must report all winnings. That will include any money you win at a physical casino, including an online sportsbook. Remember, you can always counter winnings by reporting losses as well. Keep your records organized.

2. Do you have to pay taxes on the money you win gambling online?

Again, the blunt answer is yes. Since the federal government, and many state governments for that matter, deem winnings from lotteries or gambling to be more than just good fortune. They are income that you generated by actively trying to obtain that money.

The IRS doesn’t care that you open up your handheld device to play a slot machine trying to dispense some extra change in your account. If the online slot machine produces a winner, they want their cut.

3. Do you owe taxes if you win playing daily fantasy sports games?

Not to sound redundant, but the answer again is yes. Be mindful, that to comply with federal law, daily fantasy sports providers are going to document your winnings. Any attempt to try to evade paying taxes on DFS winnings might land you in hot water with the IRS.

As with all other types of gambling, report your DFS winnings as well. DFS websites such as DraftKings and Fanduel will report winnings, especially big-ticket tournament winners. Again, federal law mandates reporting all income, including DFS prizes. Check with your state government for reporting requirements there.

4. Do you have to pay taxes on gambling winnings even if you’re not a resident of the United States?

While this question involves a little wider degree of supposition, the answer is still an emphatic yes. Even nonresidents who win at casinos or with a winning lottery ticket must pay a percentage to the federal government. Nonresidents who win at a casino must complete and submit IRS Form 1040NR.

5. Can gambling losses be written off on your tax return?

The first step is to report some amount of winnings from your gambling. This is why a ledger of your gambling activity can be useful. Once you acknowledge your winnings, you can itemize deductions for all your losses as well.

6. Do you still owe taxes if you leave all your deposits and winnings in your account?

Just because you do not make any withdrawals during a tax year, that does not negate the fact that you won. If you won money gambling during the tax year, it is a wise decision to record these winnings, and then report them according to the guidelines mentioned.

7. Are team or group gambling bets still taxed?

The same tax system that is applied to individual winnings earned from gambling, applies to any money you may win as part of a betting team. If you bet using the team concept, it is recommended you keep detailed records. The consequence is to be hit with a tax for the entire cash payout when you actually only received a percentage.

8. When you’re retired, do you still need to report winnings from gambling?

A large percentage of the casino gambling community is retired persons. You may think that since you’re retired, or on some form of fixed income, that you may not need to pay taxes on any money you win.

In all honesty, you can even be hit with a tax for winning a big bingo jackpot. If you’re retired, reporting gambling winnings can be even more important. By not reporting your gambling winnings, you can create a number of headaches for yourself.

You can be bumped into a different tax bracket, or have your medical coverage and premiums changed because of unreported income from winning at the poker table. Be dutiful with your gambling activity, especially if you’re enjoying your retirement years.

These are the basic principles of how gambling winnings are taxed. The most important principle to follow is to always report your winnings. When the alternative is to get hit with a surprise tax bill, honest consistency is the best policy.

Maintaining good records is also a worthy suggestion. Receipts can be used to itemize and deduct losses, plus you’ll know in advance how much tax you will owe on any winnings. While it might seem frivolous to keep records if you only gamble occasionally, there is always that possibility you hit a big cash jackpot.

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Filing Your Louisiana Taxes

It is tax season again – and for some new workers it’s a brand-new thing. Figuring out and filing your tax forms can be intimidating – but there is help for sure. Here you will find answers, forms and more that will make your paperwork easier, faster and less stressful. Information below will help you determine your residency status, find the forms you need and give you other information you need to get started.

State income tax returns for 2019 are due Sunday, May 15.

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Louisiana Tax Forms

• Louisiana Form R-2868 - Louisiana Application for Extension for Time for File Louisiana Individual Income Tax Return
• Louisiana Form IT-540B - Louisiana Individual Part-Year and Non-resident Income Tax Return
• Louisiana Form IT-540 - Louisiana Individual Resident Income Tax Return (Long)

Determine Your Resident Status so You File the Right Forms

Louisiana Gambling Winnings Taxable

Your residency status – where your official home address was during 2019 – is what determines which Louisiana income tax form you need to file. Louisiana uses four definitions for people who must file state income tax returns: Louisiana residents, part-year Louisiana residents, Louisiana residents who worked outside of the state, residents of another state who worked in Louisiana, and nonresidents who sold real estate or other property located in Louisiana.

Louisiana Resident

You are a resident of Louisiana if your legal home address was in Louisiana for the whole year. If you are a Louisiana resident and you file a federal income tax return or if you want a refund (for overpaid withholding for instance) you must also file a state return. Louisiana residents file Form IT-540.

Louisiana Taxes On Gambling Winnings

Depending on your particular situation, Louisiana allows deductions on various types of income – income that could be exempt from Louisiana taxation. In order to qualify for any deductions, you first need to declare that income on your state income tax return. For example, you may be eligible for a deduction of up to $30,000 if you were employed by the U.S. military and on active duty for 120 days during 2019.

You can find more information in the Instructions for Preparing Your 2019 Louisiana Resident Income Tax Return Form IT-540 (available for download above) to help you file your Louisiana resident taxes.

Part-Year Louisiana Resident

You must fill out and send in a Louisiana income tax return if your official, legal home address was in Louisiana, but only for part of the year and you filed a federal tax return. You will file Form IT-540B.

You also will probably need to send Louisiana a copy of the income tax returns that you file with any other state you lived in last year. For example, if you moved your home from another state to Louisiana during 2019, you might have to file income tax returns in both states, in addition to your federal return.

Depending on your particular circumstances, information in the next section may also apply.

Louisiana Resident – But Worked in Another State

If were a Louisiana resident in 2019 and you worked and earned income in any other state, you must include that money on your Louisiana state tax return. This is true if your income-producing work was physically in another state or if your employer was based in another state. No matter where it was earned, all income to a Louisiana resident can be subject to Louisiana state tax.

However, while you likely will need to file state income tax returns for each state (where you worked and where you lived), you may not have to pay taxes on that income in both states. You may be eligible for a credit from Louisiana on the wages you earned in the other state (your “work state”) if the income was already taxed by the other state.

You are required to report all income from all states on Louisiana’s Form IT-5. Fill out Schedule G on Form IT-5 to claim the credit to avoid dual taxation. Fill out and file a tax return for the other state(s) and include a copy with your Louisiana return. You can find further information in the Instructions for Preparing Your 2019 Louisiana Resident Income Tax Return Form IT-540 (available for download above).

Worked in Louisiana – but not a Louisiana Resident

You are a nonresident of Louisiana if you did not live in Louisiana at any time during 2019 – if you did not have a legal home address there. However, you must file a Louisiana income tax return if you earned any wages or income from any Louisiana source(s) and you filed a 2019 federal tax return. Use Form IT-540B.

You will need to include all of your income from all sources on that document, both based in Louisiana and elsewhere, but Louisiana will only tax the money you received from the Louisiana sources. You can figure out the ratio of Louisiana income to all income that has been reported to the IRS and included on your federal income tax return on Form IT-540B. For more information about the Louisiana documents please see the Instructions for Preparing Your 2019 Louisiana Resident Income Tax Return Form IT-540 (available for download above).

The Louisiana Earned Income Credit Worksheet will help you figure out the amount of Louisiana tax that you will be liable to pay on your Louisiana-based income. Here you can also calculate your deductions and “person exemptions” (credits for dependents and husband/wife older than 65 are examples).

Do you gamble? If you participated in gambling in Louisiana and won, those winnings are taxed as Louisiana income.

Louisiana Gambling Winnings Tax

If you are not a Louisiana resident and you were employed by the U.S. military and based in Louisiana during 2019, you do not have to file a state tax return for the military wages you earned in Louisiana. However, if you earned local wage income outside of your military pay while you were in Louisiana then you will need to file a Louisiana tax return on that Louisiana-based income.

Even if you did not keep a home residence in Louisiana, but during 2019 you sold real estate or other real property located here, the money you earned from that sale is taxable income in Louisiana and must be reported using a Louisiana state income tax return. You would also include this income on your federal tax return.