Taxes On Poker Tournament Winnings?
Key Takeaways • Form W-2 provides important tax information from your employer related to earnings, tax withholding, benefits and more • Your Form W-2 should be sent by January 31st of each year and be used to prepare your tax return • The IRS uses W-2s to track employment income you’ve earned during the prior year
The IRS requires employers to report wage and salary information for employees using Form W-2. Your W-2 also reports important details about the amount of federal, state and other taxes withheld from your paycheck as well as other employer fringe benefits like health insurance, adoption and dependent care assistance, health savings account contributions and more. As an employee, the information on your W-2 is extremely important when preparing your tax return. In general, if you worked as an employee in a given year, you should receive a W-2 from your employer near the beginning of the following year. To ensure you have it in time, the IRS requires your employer to send you a W-2 no later than January 31st following the close of the calendar year. Generally, this means W-2s are mailed by January 31st, but not necessarily received by employees by this date. As an employer, you must file W-2 forms with the Social Security Administration (SSA) and the IRS by January 31st but may file for a 30-day extension by submitting Form 8809, Application for Extension of Time to File Information Returns. You will need to indicate that at least one of the criteria for granting an extension applies. Even if you request and receive an extension to file W-2s, you must still provide your employees copies of their W-2s by January 31st unless you also apply for an extension to provide W-2s to your employees after the due date. You can request an extension of 15 days to provide W-2s to your employees unless you show a need for a 30-day extension by faxing a letter to the IRS. If you haven’t received your W-2 by early February, contact your employer. They might be able to provide you with an electronic version for use until you receive the paper version in the mail. TurboTax Tip: You can also use online tax software like TurboTax to import your W-2 even if you haven’t received it in the mail yet. If you receive your W-2 and notice an error on your form, whether your name is misspelled, has an incorrect social security number, wrong dollar amount, or some other issue, let your employer know and ask for a corrected W-2. You should only receive a W-2 if you are an employee. TurboTax Tip: If you are an independent contractor or work for yourself, the work you do may be similar to what an employee does, but you should receive an earnings statement on a Form 1099-NEC rather than a W-2. Form W-2 is completed by an employer and contains important information that you need to complete your tax return. It reports your total wages for the year and the amount of federal, state, and other taxes withheld from your paycheck. It may also contain information about: Boxes A-F These boxes on the W-2 provide all the identifying information related to you and your employer. You’ll see your social security number (Box A), name (Box E) and address (Box F) appear here, while your employer’s employer identification number (EIN) (Box B), name and address (Box C) and control number (Box D), if any, appear here as well. Boxes 1 and 2 Box 1 shows your total taxable income paid by your employer including any wages, salary, tips, bonuses and other taxable compensation. Box 2 shows the total amount of federal income tax withheld by your employer on your behalf. Boxes 3-6 Boxes 3 and 5 show the amount of your earnings subject to Social Security and Medicare taxes, respectively. Boxes 4 and 6 show the amount of Social Security and Medicare taxes withheld. The amounts in boxes 3 and 5 might be different from the amount in box 1. This often happens in situations where you defer income as with contributing to a 401(k) or other similar plan. Boxes 7 and 8 If you earned money through tips, Box 7 shows how much has been reported in tips while Box 8 shows how much money your employer allocated to you in tips. Box 9 The box once reported an employer benefit which no longer exists. The box is grayed out as a result. Box 10 If your employer provided or paid for dependent care benefits, Box 10 reports this amount. Box 11 If you received certain deferred compensation income from your employer from a non-qualified plan, this information is reported in Box 11. Box 12 If you received other types of compensation or reductions to your taxable income, these will be reported in the Box 12 series. You will have a single or double letter code corresponding to each, including items such as contributions made to a 401(k) plan, health savings account contributions made by your employer, or the taxable cost of group-term life insurance over $50,000. Box 13 Box 13 reports whether you worked as a statutory employee not subject to federal income tax withholding, participated in an employer-sponsored retirement plan such as a 401(k) or 403(b), or received sick pay through a third-party source, like an insurance policy. Box 14 If you have other tax information that doesn’t fit into the other W-2 Boxes, your employer may use Box 14 to report these items. Such examples include state disability insurance taxes withheld, union dues, uniform payments, health insurance premiums deducted and more. Boxes 15-20 Your employer uses Boxes 15-20 to report state and local income tax information with the two-letter abbreviation for the name of your state alongside your employer’s state ID number assigned by the state. These boxes can report wages for two states and two localities. If your employer needs to report information for more than two states or localities, they need to prepare a second Form W-2 for you to use.
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How do you pay taxes on poker winnings?
- Keep Records of Wins and Losses. Even the dullest pencil is better than the sharpest mind,and the same is true in keeping tabs on your poker activities.
- Keep Receipts,Tickets,and Documents.
- Pros Should Treat Poker As Their Business.
- Save a Chunk for the IRS.
- Consider Moving to Another State.
- File Your Taxes!
What taxes are due on gambling winnings?
- $600 or more on a horse race (if the win pays at least 300 times the wager amount);
- $1,200 or more at bingo or on a slot machine;
- $1,500 or more at keno;
- $5,000 or more in a poker tournament.
Can you deduct gambling losses from winnings?
You can deduct gambling losses against slot tournament winnings, but only as itemized deductions, and only up to the amount of your winnings. Also you need to be able to benefit from itemizing your deductions for the losses to benefit you. The standard deduction amounts for 2021 are $12,550 single filer, and $25,100 married-joint.
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What is the federal tax rate for gambling winnings?
Your gambling winnings are generally subject to a flat 24% tax. However, for the following sources listed below, gambling winnings over $5,000 will be subject to income tax withholding: Any sweepstakes, lottery, or wagering pool (this can include payments made to the winner (s) of poker tournaments).
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