If you are lucky enough to win more than $5,000 in the lottery or certain types of gambling, 24% will be withheld by the payer for federal tax purposes and remitted to the IRS.

The taxable income amount is reported as “Other income” on Schedule 1 of your income tax return and is included in your gross income. For example, if you bet $20 on your favorite sports team and win $100, your taxable income is $80. The amount of income is the net winning on per wager. Winnings at a casino, on a scratch ticket, the bingo hall, or sportsbook are taxable income. Unfortunately, you will not be so lucky when it comes to taxes.