3 Responses

1. ami

   November 25th, 2009 at 8:41 pm

   1

   This is income from gambling. You must report it and you will be taxed accordingly. It doesn’t matter how you withdraw it. You will receive a W2-G which will how your winnings and that must be put on your Form 1040. If you had any LOSSES, you can deduct that, but only up to the amount of your winnings. So if you lost $1000 you can deduct $1000. But if you lost $105,000 you can only deduct $100,000.

2. Josh

   November 26th, 2009 at 1:29 am

   2

   You must report it as income. As Ami stated you can deduct your losses up to your winnings, but if you won $100,000, then obviously you didn’t have any losses. They are going to want you to make estimated payments on the winnings using form 1040ES, which can be found at your local IRS office or can be accessed at http://www.irs.gov. If you do not pay 90% of your tax due by year’s end, you could be subject to penalty. State is going to want you to make estimated payments. For that you should consult your state’s website or treasury department. To give you an idea of the tax due for $100,000, given you are single and have no other exemptions or deductions, your tax on the winnings if that were the only money you earned the entire year would be $19,965.50. Hope this helps!

3. extra_37

   November 26th, 2009 at 2:51 am

   3

   Withdrawing the money has nothing to do with it being taxable. It became taxable when you won it. You can deduct your losses, though, as miscellaneous itemized deductions to offset the winnings. And being a US citizen, you are taxed on your worldwide income, not just on that earned in the US.