Learn how to report gambling winnings and losses on your 2025 tax return. Includes W-2G rules, deductions, recordkeeping tips, and IRS resources.
.png)
Whether you hit the jackpot on a Vegas slot machine or walk away from your favorite poker night with a little extra cash, it's important to remember: gambling winnings are always taxable. The IRS doesn’t care if it was luck or skill — if you win money gambling, you’re required to report it on your tax return.
In this guide, we’ll walk you through everything you need to know about reporting gambling winnings and losses, so you can avoid penalties and stay on the IRS’s good side.
Yes. According to the IRS, all gambling winnings are fully taxable and must be reported on your federal income tax return. This applies to:
Even if you didn’t receive a tax form, you’re still responsible for reporting the income.
Gambling winnings are reported on your Form 1040, Schedule 1, Line 8b under “Other Income.” If you received a Form W-2G, use the information provided to fill in your return. Even if you didn't receive a W-2G, you're still required to report any amount won.
A Form W-2G is issued by a payer (like a casino or sportsbook) if your winnings meet specific thresholds:
W-2Gs will show the amount you won and any federal income tax withheld. Be sure to include it with your tax return.
Even if you don’t get a W-2G, you still must report all gambling income. This is common with online gambling platforms or private games. Keep personal records to support your winnings.
If your gambling winnings are high enough, the payer may withhold 24% for federal taxes right away. You’ll see this on Form W-2G in Box 4.
You may also need to make estimated quarterly payments if you expect to owe $1,000 or more in federal tax for the year. Some states also require withholding on gambling wins. Always check your local laws.
.png)
Yes — but only if you itemize deductions on Schedule A.
If you won $5,000 but lost $3,000 gambling, you:
If you lost $6,000 and won $5,000:
Example 1: You win $2,000 on a DraftKings bet and later lose $1,200 on additional bets.
Example 2: You win $700 at a private poker game and don’t receive a W-2G.
If you're paid in cryptocurrency from a gambling platform, it is still taxable income. You must report the fair market value in U.S. dollars on the day you received the crypto.
Additionally, if you later sell or exchange the crypto, you'll have a capital gain or loss to report.
The IRS expects accurate documentation of your gambling activity. Keep a detailed diary or log that includes:
Most people are casual gamblers, but some qualify as professional gamblers if gambling is their primary trade or business.
If the IRS challenges your status, you’ll need to provide evidence.
Failing to report gambling winnings can trigger penalties, interest, or an audit. The IRS receives copies of W-2G forms and will match them to your return.
Most states also tax gambling winnings. Here are a few examples:
Check your state’s department of revenue for current rules.
For official guidance, refer to these updated resources:
Gambling might be a game of chance — but your taxes shouldn't be. Knowing how to report your winnings and losses properly ensures you stay compliant and avoid costly penalties.
If you’re unsure how to handle your gambling income, especially if you’ve had a big win or you're considering professional status, we can help.
👉 Schedule a free 15-minute consultation today and get the guidance you need to file with confidence for 2025!
Yes. All gambling winnings are taxable, no matter how small. You must report them on your federal income tax return.
No. Gambling losses can only offset gambling winnings, not other types of income.
Report the income on Schedule 1, Line 8b, even without a W-2G. Keep your own records of the amount and date.
Only if you qualify as a professional gambler and report your income on Schedule C. Casual gamblers do not pay self-employment tax.
Possibly. The IRS receives copies of W-2G forms and uses them to match your tax return. Failing to report could lead to penalties or an audit.
Being audited is comparable to being struck by lightning. You don't want to practice pole vaulting in a thunderstorm just because it's unlikely. Making sure your books are accurate and your taxes are filed on time is one of the best ways to keep your head down during tax season. Check out Vincere's take on tax season!
This post is just for informational purposes and is not meant to be legal, business, or tax advice. Regarding the matters discussed in this post, each individual should consult his or her own attorney, business advisor, or tax advisor. Vincere accepts no responsibility for actions taken in reliance on the information contained in this document.
For business tax planning articles, our tax resources provides valuable insights into how you can reduce your tax liability now, and in the future.
.png)
At Vincere Tax, we've got the skills and know-how to craft a unique, tailored plan just for you. Trust us – we've got the expertise to make it happen!
Speak with an expert Website Terms.png)
.png)
.png)
Copyright © 2025 Vincere Tax| All Rights Reserved
Privacy Policy
.png)