How is US tax applied to gambling winnings from overseas casinos?

The IRS doesn't care where you won the money - they still want their cut! All gambling winnings are taxable income for US citizens and residents, regardless of where you won them or whether the foreign country taxed them. You'll need to report the full amount of your winnings on your tax return. Convert the euros to dollars using the exchange rate on the day you won. The winnings go on Schedule 1 as "Other Income." Professional gamblers report on Schedule C instead, but that's probably not you based on your description. Gambling winnings don't have a special tax rate - they're just added to your other income and taxed at your normal rates. However, if this pushes you into a higher tax bracket, you might owe more than you expect. Keep any documentation you have from the casino. While German casinos might not issue tax forms like US ones, having evidence of your win is important if you're ever audited.

I had a similar situation last year after winning big at a casino in Macau. I struggled with the paperwork until I found https://taxr.ai - it was a lifesaver for international tax situations. Their system analyzed my situation, asked the right questions about my specific circumstances, and guided me through exactly how to report foreign gambling income. What I really appreciated was that they explained how to properly document everything to avoid red flags with the IRS. Since foreign casinos don't issue W-2Gs like US casinos, they showed me what alternative documentation I needed to maintain and how to properly convert currency amounts.

Just wanted to follow up - I decided to try taxr.ai for my Canadian casino winnings situation. The interface was super straightforward and asked really specific questions about my gambling activities abroad. They explained exactly how to convert CAD to USD (using the spot rate on the day of the win) and provided a template for documenting everything properly. Their guidance even flagged a potential issue with how I was planning to report certain losses that could've triggered an audit. I was able to take their report to my tax guy, and he was impressed with how thorough it was. Definitely saved me from making a mistake that would've cost me more in the long run!

Since you're dealing with such a large amount, one thing to consider is that you might have trouble getting responses from the IRS if you need to clarify anything. I had a foreign income question last year and spent WEEKS trying to get through to the IRS. I finally used https://claimyr.com and was shocked when they actually got me through to an agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c With over $67K at stake, getting official clarification directly from the IRS might be worth it, especially since foreign income reporting can get complicated. They connect you with actual IRS agents who can answer specific questions about your situation.

Well I'm eating my words about Claimyr. After my skeptical comment, I was still struggling to reach the IRS about some foreign income questions (not gambling related, but still overseas income issues). After my fifth attempt and wasting another 90 minutes on hold before getting disconnected, I reluctantly tried the service. Got connected to an actual IRS agent in about 20 minutes. The agent was able to answer all my specific questions about reporting requirements for foreign income and saved me from making a serious filing mistake. I don't like admitting when I'm wrong, but in this case the service actually delivered exactly what it promised. Wish I'd used it weeks ago instead of burning so many hours on failed attempts.

One important thing that hasn't been mentioned - you may also need to file an FBAR (FinCEN Form 114) if at any point you had over $10,000 in foreign accounts. This includes temporary casino accounts, not just bank accounts. The penalties for not filing FBARs are WAY worse than regular tax issues. Also, if you physically carried more than $10,000 in cash back to the US, you should have filed a Currency and Monetary Instrument Report (CMIR) when entering the country. If you didn't, you might want to consult with a tax attorney about your options.

Just wondering - has anyone used TurboTax for reporting foreign gambling winnings? Does it handle this situation well or is it worth paying for a professional this year?

Congratulations on the big win! Just to add to what others have said - since you mentioned this was during a business trip, make sure you don't accidentally try to deduct any gambling losses as business expenses. The IRS is very strict about keeping business and personal expenses separate, even when they occur during the same trip. Also, with that amount of winnings, you'll likely need to make quarterly estimated tax payments for this year to avoid underpayment penalties. The general rule is you need to pay 90% of this year's tax liability or 100% of last year's (110% if your prior year AGI was over $150k). A big gambling win can throw off your usual withholding calculations. Given the complexity with foreign accounts, FBAR requirements, and the substantial amount involved, I'd strongly recommend finding a CPA or tax attorney who specializes in international tax issues. The cost of professional help will be much less than potential penalties for getting it wrong.

Wow, €67,500 is quite a windfall! I went through something similar with winnings from a London casino a few years back. Here's what I learned the hard way: First, definitely report it all. The IRS has information sharing agreements with many countries, and large cash transactions often get flagged automatically. Better to be proactive than get caught later. For the exchange rate, use the IRS's yearly average exchange rates (they publish these on their website) or the rate from a major financial institution on the day you won. Keep documentation of which rate you used. One thing I wish I'd known earlier - if you're going to itemize to claim gambling losses, you need to be able to prove every loss with documentation. I learned this during an audit. Even small losses at slot machines need to be recorded with date, time, casino, and amount. Without proper records, they'll disallow your loss deductions while still taxing all your winnings. Also, since you opened a German bank account with the funds, that's definitely going to trigger FBAR requirements. The deadline for FBAR is October 15th (with automatic extension), separate from your regular tax return deadline. Given the amounts involved and the international complications, I'd really recommend getting professional help. The peace of mind alone is worth it when you're dealing with this much money and potential penalties.

This is exactly the kind of situation where proper documentation and professional guidance are crucial. With €67,500 in winnings, you're looking at a significant tax liability that needs to be handled correctly from the start. A few additional points to consider: Since you mentioned this happened during a business trip, make sure to keep your business expenses and personal gambling activities completely separate in your records. The IRS gets very suspicious when they see gambling activities mixed with business travel deductions. For currency conversion, I'd recommend using the Federal Reserve's historical exchange rates for the specific date you won, rather than annual averages. This gives you the most defensible position if questioned. Document which source and rate you used. Given that you've already opened a German bank account with these funds, you're definitely in FBAR territory. But don't panic - just make sure you file FinCEN Form 114 by October 15th. The penalties for late FBAR filing are severe, but filing on time (even if late on your regular tax return) avoids the worst consequences. One strategy to consider: if this windfall pushes you into a much higher tax bracket, you might want to explore income-smoothing strategies with a tax professional. Sometimes spreading the recognition of income across tax years can reduce your overall tax burden, though the rules are complex for gambling winnings. Bottom line: with this amount of money involved, the cost of professional tax help will be a tiny fraction of your potential tax liability and will give you peace of mind that everything is handled correctly.

This is a really comprehensive discussion! I wanted to add one more important consideration that hasn't been mentioned yet - state tax implications. Depending on which state you're a resident of, you may also owe state income taxes on these foreign gambling winnings. Some states like Florida, Nevada, and Texas don't have state income tax, so you'd only deal with federal. But if you're in a state like California or New York, you could be looking at an additional 10-13% state tax on top of your federal liability. Also, just to emphasize what others have said about professional help - with the combination of foreign winnings, FBAR requirements, potential quarterly estimated payments, and the sheer size of this windfall, this is definitely not a DIY tax situation. A good international tax CPA will probably save you more in avoided mistakes and optimized planning than their fees cost. One last tip: start gathering all your documentation now rather than waiting until tax season. Get statements from both the German casino and your new German bank account, document the exact exchange rates you'll use, and if you have any receipts from that evening (hotel, meals, transportation), keep those too as they help establish the timeline and legitimacy of your activities. Congratulations again on the big win, and good luck getting everything sorted properly with the IRS!

What a great discussion thread! As someone who works with international tax issues regularly, I wanted to add a few practical tips for your specific situation: First, regarding the €67,500 conversion - I'd recommend using the Treasury's daily exchange rates (available on their website) for the exact date you won. This is typically more defensible than bank rates if the IRS ever questions your conversion method. Second, since you mentioned you were "completely clueless" about this initially, consider this a learning opportunity to set up proper systems going forward. If you plan to gamble internationally again, start a dedicated gambling log immediately - even a simple smartphone app can help you track sessions in real-time. One thing I haven't seen mentioned is the potential impact on your Adjusted Gross Income (AGI) for other tax benefits. A $90,000+ boost to your AGI (rough USD conversion) could affect eligibility for various deductions, credits, or even financial aid if you have kids in college. Your tax professional should review these downstream effects. Finally, while everyone's focused on the current tax year, don't forget that you'll likely need to adjust your 2024 estimated payments if you plan to keep that money in the German account earning interest. Foreign interest income has its own reporting requirements! Definitely agree with the consensus here - professional help is essential given the complexity and amounts involved. Good luck!

As a newcomer to this community, I'm amazed by the depth of knowledge and helpful advice being shared here! Reading through this entire discussion has been incredibly educational. I wanted to add one consideration that might be relevant for your situation - since you mentioned this was such an unexpected windfall during a business trip, you might want to think about setting aside money immediately for your tax obligations rather than spending or investing it all right away. With federal taxes potentially in the 32-37% range for this amount (depending on your other income), plus California state taxes around 9-13%, plus potential penalties if you don't make adequate estimated payments, you could be looking at owing $35,000-$45,000 or more in taxes on these winnings. I'd suggest opening a separate savings account and immediately parking at least 45-50% of your winnings there specifically for taxes. This way you won't be scrambling to come up with tax money next April, and if you end up owing less than expected, you'll have a nice bonus left over. The psychological aspect is important too - it's much easier to set aside tax money right after a big win when you're feeling flush than it is to come up with that same amount months later when the excitement has worn off and you've gotten used to having the extra money. Congratulations on your incredible luck, and thanks to everyone else for sharing such detailed and helpful guidance!

As someone who's dealt with similar international tax complications, I want to echo what others have said about getting professional help, but also add a timeline consideration that's crucial for your situation. Given that this happened recently and we're already well into the tax year, you need to act quickly on several fronts: 1. **Immediate estimated payments**: With winnings this large, you'll likely trigger underpayment penalties if you don't make quarterly estimated payments. The next deadline is coming up fast, so calculate roughly what you'll owe and get a payment submitted to avoid penalties. 2. **FBAR compliance**: Since you opened that German bank account, the FBAR deadline is October 15th with automatic extension, but don't wait. Get familiar with the FinCEN Form 114 requirements now. 3. **Documentation while it's fresh**: Contact the German casino ASAP for any available documentation of your win. International paperwork can take weeks to obtain, and memories fade. Get everything in writing while the details are still clear. The advice about setting aside 45-50% for taxes is absolutely critical. In your shoes, I'd immediately transfer that amount to a separate "tax account" and treat it as already spent. The worst feeling is having to scramble for tax money months later when the reality of the bill hits. One more thing - consider consulting with both a tax professional AND a financial advisor. This windfall could significantly impact your overall financial planning, retirement contributions, and investment strategy going forward. You've got a great problem to have, but it definitely requires immediate and careful attention!