Do you live in Florida and you have just won a big prize by wagering CS:GO skins? Congratulations! However, if you’re here, then it’s because you’re worried about the taxes you might be obligated to pay, and that’s why we’ve created this article.
We’ll let you know the taxes you might be demanded to pay after winning a prize at any CSGO casino site, so that you can avoid possible penalties.
Are Skin Gambling Winnings Taxable in Florida
Unfortunately, the answer is yes. Even though the Sunshine State is one of the friendliest places in terms of taxes, all skin gambling winnings are taxable and hence you must pay. However, we’re talking about federal taxes paid to the IRS, because the good news is that Florida doesn’t have a state tax on personal income.
Therefore, Florida itself is not taxing your gambling winnings but rather the IRS at a federal level, and you better be ready for it because the fines and penalties for not reporting or underreporting your skin gambling winnings can get seriously big.
Traditional casinos, online casinos and bookmakers will withhold anywhere from 24% to 30% of your winnings if they surpass the $5000 USD mark. But when it comes to skin gambling casinos, they won’t do it, so you need to handle the matter on your own, so that you can avoid penalties.
However, it’s worth noting that the 24-30% taxation might not be all that you need to pay, because it will depend on how much you earn per year, so that you can pay your taxes according to your earning bracket. We’ll discuss all about it in the next sections because it will vary depending on how much you earn and other factors.
Do You Need to Report Skin Gambling Winnings in Florida?
Yes, regardless of the type of gambling you took part in – be it skins gambling, esports betting, online slots, etc. – you need to report your winnings in Florida. The way of reporting these winnings is by classifying them as income on your 1040 returns.
For other types of “conventional” gambling activities, the IRS itself will send you the Form W-2G to make the process easier. But since we’re talking about a different type of gambling, you need to rely on the 1040 to report the winnings and pay the due taxes.
It’s important to note that you need to report all the winnings. For example, if you won a prize of $10,000 USD by wagering CS:GO skins, and you wagered a total worth of $100 to win that prize, you still need to report the $10,000. The IRS does not take into account the value of the skins you wagered to win the $10K nor the previous tries before winning the big prize, so this is something to consider.
How Much Do You Really Have to Pay in Taxes for Skin Gambling Winnings?
As we said, it will depend on how much you make per year. If you’re placed in the lowest earning bracket, then you only have to pay 10% on your total income. However, if you are a high earner, then you need to pay 37%. So, if you’re in the top tier and you win a prize of $10,000 USD by wagering skins at CS:GO gambling sites, then you would need to pay a total of $3,700 USD in federal taxes to the IRS.
While it’s possible to avoid paying taxes by cashing out the winnings via cryptocurrencies or CS:GO skins, we encourage you not to. Because the fines and penalties for not reporting or underreporting can quickly surpass the money you save by not reporting your winnings to the IRS.
Taxes are a complex matter; therefore, take this article as an overview on the issue. If you want further advice on how to handle the winnings and losses of skins gambling, we encourage you to consult with an accountant in Florida. A proper accountant can help you to minimize the impact of taxation on your gambling winnings legally, especially if this is a frequent activity.