Large Gaming Winnings in the US on Slot Machines
Jackpots in the us on slot machines can range from 1200$ to multimillion dollar figures as in megabucks. When you win smaller jackpots up to 5000$, the money is usually given to you by a casino attendance after verification of the machine. In the case of larger jackpots, the casino technicians will make sure that the machine is full working order and has not malfunctioned. If you are lucky enough to win big time then the slot company officials in charge of operations will first check for proper functioning of the machine and then hand you a check for the amount. You can also request cash, but extremely large amounts are paid by check. Multimillion dollar jackpots are typically paid in parts. You may be paid 50% by the casino and thereafter you will be given time to decide whether you want the remainder in a total amount or paid to you in installments.
IRS rules governing large winnings. Federal rules state that casino winnings above 1200$ on slots and various games have to be reported. The casino will also give you a W2g form which requires you to fill in all your personal details like address, number and social security number. Even in smaller jackpots up to 5000$, if you do not furnish the social security number, then the casino withholds 28% of the money. If you wish you could request the casino officials to withhold a percentage of your winnings so that you do not have to bother about a tax declaration later when you file returns. On the plus side it’s also important to remember you are also permitted to deduct any losses incurred from your winnings.
Although tax returns on casino winnings can be tiresome, there is a way to minimize the liability. Every casino has a players club where becoming a member will accord you certain benefits. A statement of your winnings and losses and a record of your casino activity will be issued to you once in the accounting year. This statement can be used as a record of your losses where after deduction the rest of your winnings will be taxable, but since these statements are not 100% accurate it’s important to maintain your own records in case of an audit
A logbook is a perfectly acceptable way to maintain these types of IRS deductions. A log needs to have a record of at least four games. The benefit of logs and statement is not only reduction of taxes but helps you to monitor your losses so that you can quit on games that incur more loss than wins.
Identification details are also necessary on large winnings failing which you could be refused on a payout. Id proofs also certify your age where under age layers will not be eligible to receive money despite of winning. This is because it is illegal for a minor to gamble.
It is also advisable to plan in advance the manner in which you plan to receive your payout in event of a large win. This helps you decide how much you want to withhold and how much you would like paid upfront and how much of the balance later.