Is money you win in a casino taxed? Reporting small blackjack winnings

Wait, so the casino only reports to the IRS if you win over $1,200? Does that mean the IRS has no way of knowing about smaller amounts unless you self-report? Also, what's the deal with tracking losses? Do I need receipts or something if I want to deduct them?

The casino generally only issues W-2G forms for larger winnings ($1,200+ from a single bet), but that doesn't change your obligation to report all income. While the IRS might not have direct knowledge of smaller winnings, legally you're still required to report them. For tracking losses, the IRS does expect documentation if you want to deduct them. Ideally, you should keep a gambling journal noting dates, locations, game types, amounts won/lost, and witnesses if applicable. Some casinos offer player cards that track your play, and bank statements showing ATM withdrawals at casinos can also help substantiate your claims.

Does this taxr.ai thing actually connect to the IRS systems? Like can they see if I've had gambling winnings that weren't reported to me on forms? I'm nervous about using online tools with my tax info.

How does it handle gambling losses though? I've heard those are really tricky to document properly and the IRS is super picky about proof for deductions.

It doesn't connect directly to IRS systems - it's more like an intelligent guide that analyzes your situation based on what you tell it. It's completely private and just helps you understand what you need to report based on current tax rules. For gambling losses, it actually walks you through exactly what documentation you need and how to properly claim them as itemized deductions on Schedule A. It explained that you need to keep a diary or similar record of your gambling activities along with receipts, tickets, statements or other documentation. Really clear explanations about what counts as adequate proof.

How exactly does this Claimyr thing work? I've spent HOURS on hold with the IRS and never get through. Is this just another paid service that doesn't actually deliver?

Yeah right. Nobody gets through to the IRS these days. I'll believe it when I see it. Their hold times are legendary bad - no way some service is magically fixing that.

It's actually pretty straightforward - they use some kind of callback technology that holds your place in line with the IRS. When you're getting close to the front of the queue, they call you so you can connect with the next available agent. I don't know exactly how they do it, but it worked for me. No, it's not just another scam. I was skeptical too but it legitimately got me through to an actual IRS representative when I'd previously wasted hours on hold and getting disconnected. They don't answer tax questions themselves - they just solve the connection problem so you can talk directly with the IRS.

Isn't that technically tax evasion though? I'm not trying to be a goody-two-shoes but I don't want to risk getting in trouble over something relatively small. What's the potential penalty if they somehow found out?

Technically yes, not reporting income is against the rules. But realistically, the IRS isn't going to come after you for such a small amount when they don't even have documentation of it. The potential penalties would include paying the tax you owe plus interest, and possibly an accuracy or negligence penalty of 20% of the unpaid tax. For $275 in winnings, we're talking about maybe $60-80 in taxes depending on your bracket, so even with penalties, it's pretty minimal. The chance of them discovering this without any reporting from the casino is extremely slim. Not saying you should break the rules, just sharing what many people do in practice.

This is such an important point that people miss! I made this mistake last year when I reported about $800 in casino winnings. I tried to claim my losses too but still took the standard deduction. My tax software flagged it as an error. For most people, unless you have mortgage interest or huge medical expenses, the standard deduction ($13,850 for single filers in 2023) is WAY higher than what you'd get itemizing.

This is really helpful context from someone who actually does tax prep! I'm curious though - when you say "many people don't bother" with amounts under $600, is that just based on what you observe, or is there some kind of unofficial threshold the IRS uses? I'm trying to figure out if there's a practical difference between what's technically required and what actually gets enforced. Also, the point about being consistent with ALL gambling activity is good - I definitely didn't think about having to track every single casino visit if I report one.