Most people who go to a casino do not know that their winnings could affect their taxes. However, gamblers can face serious penalties for not reporting their winnings on their tax returns.
The state of Maryland offers a variety of lottery games that individuals can play to earn cash prizes. In some cases, those prizes will be given to a custodial parent or to the government itself. This is true for those who owe more than $150 in back support or who have an outstanding tax debt.
The rise of online gaming means that there are many opportunities for enthusiasts to enjoy casino-like games as well as sports betting and other gambling activities. However, many of these sites are run and operated outside of the United States, even though Americans in Maryland and across the country have brought in substantial winnings from those sites. If you enjoy online gambling, you may wonder how to handle tax issues that could arise as a result.
Maryland residents who gamble casually should report all of their winnings on their federal income tax return. Individuals should also report the fair market value of any prizes won such as a car or vacation. Examples of gambling include playing the lottery or betting on horses at a track. Money won at a casino is classified as gambling winnings as well.