If you’re a Canadian gambler then you might not realise that gambling winnings could be liable to taxation. Some people don’t realise that gambling winnings must be reported as income on your tax return and therefore are fully taxable. This includes cash winnings from sources such as casinos, lotteries and sports bets; however, it is also the fair market value of physical prizes such as holidays and cars.
What Happens if You Win?
If you win a large gambling prize, then it is recommended that you seek advice from a financial advisor to ensure that you get things right. You will likely be issued a W-2G form and then will be able to take things from there; you may be required to pay an estimated tax before your tax return is due.
Gambling is a popular pastime and therefore more and more Canadians are giving it a go. This is great but it is important to recognise that whether you have a lucky bet on the horses or you win a large cash prize during an online game of poker, it could very well be subject to tax. Of course, this isn’t a reason not to take part in the hobby you enjoy but it is a reason to get advice and ensure that you don’t run into trouble later down the line if you don’t pay the right fees due on any winnings.
Land-based casinos are no exception and if you visit one of these within Canada then you are liable to pay tax on any winnings. However, if you have been unlucky and lost a little money on a slot machine or weren’t quite as lucky at Blackjack as you expected then you may be able to claim these as losses on your tax return; another reason to seek some professional financial advice.
Places like Fair Go Casino offer such a wide range of games, which helps to ensure that if you want to get your casino fix online then you’ll be able to. However, it is worth keeping in mind that whether you with at Princess Warrior or beat everyone at video poker, your winnings could be subject to tax within Canada
It is advisable that you whether you pay online or you visit land-based casinos you keep a record of your winnings and losses. That way, when it does come to completing your tax return at the end of the year you have a good idea of what you have had in & spent out, which makes filling in the gambling section of your tax return (Form 1040) a much simpler prospect.