Does Louisiana Tax Gambling Winnings
Filing Your Louisiana Taxes
- Does Alabama Tax Gambling Winnings
- Louisiana State Tax On Gambling Winnings
- Louisiana State Tax Gambling Winnings
- Louisiana Gambling Winnings Tax Rate
For federal taxes, lottery winnings are taxed according to the federal tax brackets. Federal tax brackets are progressive, so portions of the winnings are taxed at different rates, and could be as high as 37%. State income taxes vary by location. Some states do not have a state income tax, while others may withhold up to 8.82%. 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. 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.
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
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.
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.
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.
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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.
Does Alabama Tax Gambling Winnings
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.
Louisiana State Tax On Gambling Winnings
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.
Louisiana State Tax Gambling Winnings
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.
Louisiana Gambling Winnings Tax Rate
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.
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.