A Canadian, together with his two brothers went to the Strip to attend a bachelor party. As with all other guests at the Strip, trying their luck on the slots is but natural. Thirty minutes after sitting down on the Wheel of Fortune progressive slot, the familiar raucous coming from a winning slot went off! For this man, and his brothers, the Memorial Day Weekend trip proved to be lucky indeed!
How much did he bet to win then progressive jackpot? IGT and the Cosmopolitan are hush-hush on the subject.
Required Casino Taxes
Since the winner is Canadian, is there an issue regarding to casino taxes winners have to pay?
Turbo Tax confirmed that unlike income taxes, winnings from any gambling are not progressive. It will not matter if a person wins $1,000,000 or a mere $10,000. The Internal Revenue Service (IRS) will still require that a flat 24% is deducted from the total winnings. The rate used to be 25%, but for tax year 2018, there is a 1% decrease. Hooray!
The IRS requires casinos to withhold 24% for every winning of:
• Horse racetrack – $600.00
• Bingo or slot machine – $1,200.00
• Keno – $1,500.00
• Poker – $5,000.00
If winnings for a particular gambling is less than the ones above, then there is no need to withhold from the total winning.
Based on the federal law, the winning Canadian player took home $1,005,290.67, while the Cosmopolitan casino withheld $317,460.20 from the Wheel of Fortune total jackpot prize. To document the withholding tax, the winner was given a W2-G form to declare his gambling winnings. When the IRS season begins, this form will prove that he has already paid taxes for his winnings.
The Canadian’s tax liability might be reduced back home because of the paid foreign taxes of his winnings abroad.