Gambling winnings are taxable and must be reported to the Internal Revenue Service (IRS). The amount taxed depends on the type of gambling and the total winnings. Here’s a quick breakdown:
- **Federal Taxes**: Generally, gambling winnings are taxed at a flat rate of 24% if they exceed $600.
- **State Taxes**: State tax rates vary; some states have no taxes, while others can go up to 13%.
- **Reporting**: Winnings over $5,000 generally require withheld tax before payout.
- **Deductions**: You can deduct gambling losses only if you itemize deductions and have records to prove your losses.
For accurate reporting, always keep detailed records of your gambling activities.
