The W-2G Form

• The W-2G form is an informational return, much like the W-2 you might receive from an employer or a 1099 form that you receive from a bank that pays you interest. It has places where the gaming facility at which you won can report on their identity, your identity, your winnings and the game at which you won. You receive a copy of the W-2G form for your records and copies are also filed with both the IRS and your state and/or local taxing authorities.
  
  

Reporting Thresholds

• Gaming facilities do not have to submit a W-2G every time that you win money. In fact, the minimum threshold for reporting varies depending on the game that you play. According to the IRS' instructions for form W-2G, gaming facilities must report winnings of $1,200 or more on a slot machine or in a bingo game. In addition, net winnings of $1,500 or more from keno, $5,000 from a poker tournament, or $600 or more from any other game in which the payout is at least 300 times the amount bet. While slot and bingo winnings are reported in gross, winnings from other games are only reported after subtracting the cost of the wager.
  
  

Withholding Thresholds

• Your winnings may be subject to one of two types of withholding: regular gambling withholding at 28 percent or backup withholding at 31 percent. Gambling withholding gets taken from net winnings o more than $5,000 in sweepstakes, wagering pools, lotteries or other types of gambling where the payout is 300 or more times the original bet, including keno, slots and bingo. If you win enough to trigger W-2G reporting and do not provide a taxpayer identification number, you will be subject to backup withholding of 31 percent.
  
  

Deducting Gambling Losses

• If you itemize your deductions on Schedule A, you can deduct any of your gambling losses up to the amount of your winnings. For instance, if you lost $700 before winning $2,000 on a slot machine, you could deduct those $700 in losses and expenses, reducing your taxable gaming income to $1,300. Remember that you will need to be able to substantiate your gambling losses in the event that you are audited.