Minimum winnings on Tax Form W-2G?

Question

The IRS's form on W-2G (http://www.irs.gov/pub/irs-pdf/fw2g.pdf) says that a payer has to send you a form if they pay out $600 or more to you.

If someone were to gamble at, say, 10 casinos and earns exactly $599 at each one, does the winner still have to report the little less than $6,000? In other words, are W-2G forms sent out individually by each payer, or is it a combined effort? Thanks.

Answer 1

I have never received a form and have cashed out way more then $600 at a time from many casinos. Not one has sent me a thing. Most of my cashouts are usually about $1000 and sometimes more, and I play at almost every trusted casino online.

Answer 2

The W-2G will be sent out by each casino and that is only if the casino obtains your name and address from you.  It is not a combined effort. In other words, you will know if it will be sent to you.  Not all casinos will ask for your name and address even though technically they are supposed to so if they don't ask, you will not be getting a W-2G.

Answer 3

It is the casino's responsibility to report each win if it is higher than the minimum taxable threshold. These are sent out individually by each casino, and rely on them getting your name and address. For the larger ones, this isn't an issue, as they can put together your stay at the hotel, your credit card payments for your room and meals, and when you cash chips.

In practise many casinos just don't bother to get this information, and don't bother to send off W2-G forms unless it's a really big payout.

So in your example, none of the casinos would send out W2-G forms, as your winnings at each one are under the taxable threshold, and the payer's do not 'pool' their payment information.

Strictly speaking though, you should be reporting all those winnings, on From 1040 - check line 12, Other Income. You can offset your losses using line 28, Other Miscellaneous Deductions, on Schedule A. You don't have to meet a certain level of losses before you can claim, but you can only claim losses up to the total amount of your winnings.

Whether or not you actually do this is up to you - using the above amounts, with the casinos not reporting the payouts, it's pretty unlikely you'd get caught out.