Most people dont think about taxes on their way to a race track or casino,but what might seem like nothing more than the chance to win some extra moneyactually carries significant tax implications. As is often the case, federal and state governments single out casino winnings for unique taxes of their own. Here is what you need to know about reporting gambling winnings:

Gamblers are lucky in that casino taxes are not progressive like income taxes are. That is, you will owe the same percentage to the IRS on a $100,000 jackpot as a $10,000 one. Yet, its important to know the thresholds that require reporting. Winnings in the following amounts must be reported:

All of these require giving the payer your Social Security number, as well as filling out IRS Form W2-G to report the full amount won. In most cases, the casino will take 25 percent off your winnings for the IRS before even paying you.

Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-G forms are not required for winnings from table games such as blackjack, craps, baccarat, and roulette, regardless of the amount.Note that this does not mean you are exempt from paying taxes or reporting the winnings. Any and all gambling winnings must be reported to the IRS. It only means that you do not have to fill out Form W2-G for these particular table-based games.

Even if you do not win as much as the amounts above, you are still legally obligated to report. You also need to report any awards or prize money you won during the year in question. Yes, even if you only win $10, you still technically have to report it (even if the casino didnt). Gambling income plus your job income (and any other income) equals your total income.

Fortunately, you do not necessarily have to pay taxes on all your winnings. Instead, if you itemize, you can claim your losses up to the amount of your winnings.

In addition to federal taxes payable to the IRS, many state governments tax gambling income as well. Each state has their own unique formulas and rules for gambling income, and some levy no gambling taxes at all. Others charge a flat percentage, while still others ramp up the percentage owed depending on how much you won.

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How Are Gambling Winnings Taxed? | The TurboTax Blog