If you won money at a casino, horse race, raffle drawing, or lottery, you need to pay taxes on that income. Here’s what you’ll owe and what you can do to reduce your tax bill.
What counts as gambling income?
Gambling income is what you win from lotteries, raffles, horse races, casinos, and other types of gambling. It includes cash and other prizes. For example, if you win a car, you’ll owe taxes on the car’s fair market value.
What tax form do you get for gambling income?
You will receive a Form W-2G if you receive gambling winnings over a certain amount or if you have income taxes withheld on your gambling income. You can see the IRS instructions here.