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Jennifer Horikawa of Maui, Hawaii, plays on a slot machine at the Main Street Station hotel-casino in downtown Las Vegas on Tuesday, May 26, 2015. The Internal Revenue Service has proposed lowering the reporting level for gambling winnings from $1,200 to $600, a move that the casino industry and its patrons oppose. (Chase Stevens/Las Vegas Review-Journal) Follow Chase Stevens on Twitter @csstevensphoto.
Your gambling winnings are generally subject to a flat 25% tax. However, for the following sources listed below, gambling winnings over $5,000 are subject to income tax withholding: Any sweepstakes, wagering pool (including payments made to winnners of poker tournaments), or lottery.f you have gambling winnings, you must report them on Line 21 of Form 1040. You won't be able to use Form 1040EZ or 1040A. But you can use efile.com to prepare and efile your tax return with ease. The software walks you through the tax preparation process, helps you fill out the right forms, and checks for errors.