Louisiana gambling tax: Winnings, losses, and more

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No one likes to lose money when it comes to gambling, but that is one of the most common scenarios. The question you have then is, do you have to pay taxes on your winnings? Can you write off your losses? Understanding Louisiana gambling tax is a good starting point. Before you put down another bet, there are a few things you will want to keep in mind.

louisiana gambling tax

Louisiana state tax on gambling winnings

If you go to work each day, you likely pay taxes on your income. What happens if you win big at the casinos, though? The Louisiana Department of Revenue says that you must pay taxes on your gambling winnings if you win.

Under state law, any person or business supposed to pay you gambling winnings must withhold 6% of those funds from your winnings to be paid as taxes. For example, if you play a slot machine and win $1,200, you have to have 6% of your winnings withheld (and then the state requires that the organization that pays you to provide you with a W2-G at the end of the year to show how much you won) so it can be reported to the IRS. That is for the IRS.

What you need to know about gambling taxes in Louisiana

The tax rate a person pays depends on their income and tax bracket. However, all earnings are subject to both federal and state taxes. The rate paid, then, is dependent on many factors.

Louisiana has a flat state income tax that applies to all land-based locations of 10%, such as visiting a casino. However, now that online bets are happening, there are taxes on this. In Louisiana, online bets are charged at 15% on all winnings. The gambling winnings tax overall can be high.

How do I prove gambling losses on my taxes?

Many people who gamble will play numerous times, and most of the time, they do not win. What does that mean about your losses? If you itemized your tax deductions for the tax year, you may be able to list your gambling losses. However, it is best to work with your tax professional to determine if that is the right decision (based on your tax bracket and other tax deductions you may qualify for).

What if I live in another state?

What about if you are visiting Louisiana and win big, but you live in another state? If you live in a state like Texas, where there is no tax on these winnings, Louisiana pulling taxes on you is rather out of line.

Any nonresident with income (winnings) from Louisiana sources who is required to file a federal individual income tax return must file a Louisiana return reporting income earned. If the amount withheld is overpaid, a refund of the difference will be issued or credited.  You must file Form IT-540B, Nonresident and Part-year Resident Return, to report your winnings and withholdings to Louisiana.

How much money can you win gambling without paying taxes?

Typically, the IRS requires that any winnings over a $600 threshold be reported to the IRS and taxes paid. At slot machines, the winnings of over $1200 require filing taxes. You need to report that if you win $1,500 or more in keno.

The key here is to stay current on the type of gambling winnings you have. If the gambling organization is collecting your personal information or withholding any winnings from the awards they pay you, they are reporting that to the IRS. You need to keep track of that amount and, as applicable, report the winnings to the IRS (and the state of Louisiana) on your taxes for the year.

Are you facing concerns about sports gambling taxes?

You are not alone. With the change of law comes a lot of information that needs to be clarified. It is a good idea to turn to a tax professional if you win a significant amount of money to follow the law in reporting your earnings.

More so, these laws are changing frequently, especially now that online gambling is occurring in the state. You do not want to put yourself at risk for nonpayment or have to pay fines on top of the taxes that you owe for your gambling winnings.

Our Lake Charles criminal defense lawyer can help you. If you are facing any charges for criminal acts, we encourage you to contact us now for a consultation. Call (337) 433-1414 to learn how we can help you.

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