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Both cash and noncash gambling winnings are fully taxable.
Cash winnings include money you received from:
Your winnings might be noncash -- like a vacation or a car. If so, you must include its fair market value (FMV) when figuring your income.
If you itemize your deductions, you can deduct your gambling losses for the year on Schedule A. However, you can only deduct your loss up to the amount you report as gambling winnings. So, you should keep:
The payer must provide you with a Form W-2G if you win:
If your winnings are reported on a Form W-2G, federal taxes are withheld at a flat rate of 25%. If you didn’t give the payer your tax ID number, the withholding rate is 28%. Withholding is required when the winnings, minus the bet, are:
You should receive a copy of your Form W-2G showing the amount you won and the amount of tax withheld. Even if you don't receive a Form W-2G, include your winnings on your return.