Missouri Gambling Winnings Tax Calculator: MO Gambling Tax Laws Explained
Gambling overall has been legal in Missouri for decades, dating back to the approval of the lottery in 1984, but the most popular casino games are restricted to riverboats and dockside brick-and-mortar establishments located near bodies of water such as the Mississippi and Missouri rivers.
While Missouri sports betting is not yet legal in the state pending ongoing legislative efforts, casino players obviously have a very keen interest in how they would be taxed on winnings if they were lucky enough to beat the casinos. This page covers Missouri gambling winning taxes and includes relevant information for casino players to reference.
Missouri Gambling Tax Calculator
In order to simplify Missouri gambling taxes for casino players, the Missouri gambling tax calculator tool below can be used to find out what amount might be owed on any potential winnings. All you have to do is enter your total annual taxable income and the total amount of winnings accrued for that year to calculate the Missouri gambling taxes you will need to pay the IRS. The final output will be the Missouri gambling winnings taxes you owe.
Keep in mind, Missouri withholds 4 percent of any single gambling winnings over $1,200, including those resulting from electronic gaming device or table game jackpots. This same tax rate is applicable for state lottery winnings over $600 as well. Any income in the state overall totaling more than $8,968 is taxed at the highest rate of 5.4 percent, and the federal tax rate on gambling winnings is 24 percent if reported on a W-2G tax form. The Missouri gambling tax calculator accounts for that.
Are Gambling Winnings Taxable in Missouri in 2023?
Yes, according to the Missouri Gaming Commission and the Missouri Department of Revenue, you are responsible for paying taxes on gambling winnings both on state and federal levels. As mentioned earlier, there are obviously different tax rates for state and federal with regards to income, so you will first need to figure out what you owe for each and then total them together to determine the overall liability for your Missouri gambling winning taxes.
What are the Gambling Tax Rates in Missouri?
Again, tax rates for MO gambling winnings are broken into state and federal designations and depend on total income earned overall. The numbers below reflect the Missouri state income tax brackets for 2022 with the earnings listed on the left and appropriate tax rate on the right.
History of Gambling Tax Regulation
The Missouri Lottery was approved in 1984, with the first game ticket sales taking place on January 20, 1986. This is when the 4 percent state tax was instituted on lottery winnings of more than $600, and a 24 percent federal tax has since been added when that amount reaches over $5,000.
These numbers have been the basis for Missouri gambling winning taxes to this day, with the 4 percent state rate carrying over to cover single jackpots for table games and other electronic device gaming such as video slot machines. In addition, the maximum Missouri individual state income rate was reduced slightly from 5.8 percent down to 5.4 in 2019.
How Does The IRS Know If You Won Money Gambling?
The IRS will issue a federal W-2G tax form in certain instances when different winning thresholds have been met. For example, any jackpots won that total more than $1,200 or lottery winnings over $600. The baseline for this automatic tax trigger is when the winnings are equal to or more than 300 times the initial amount wagered, including set amounts of $1,500 for Keno and $5,000 for a poker tournament if that multiplier requirement is met.
How to Claim and Report Missouri Gambling Winnings for Taxes
If you think you might be responsible for Missouri gambling winning taxes, the first thing you should look out for is a W-2G form. You should receive a W-2G form from a casino or possibly another payer of certain jackpot or lottery winnings that reach a specific threshold, and the IRS will have that information on file too.
You will then organize this documentation together -- totaling all of your winnings -- and then subtract any potential losses to find out if you might be able to receive a tax deduction instead. You should itemize this info on Schedule A of federal tax form 1040 to officially claim and report wins or losses.
What to Do if You Do Not Receive a W-2G Form in Missouri?
If you do not receive a W-2G tax form in Missouri, that means you likely did not win a big enough jackpot to to get one issued to you automatically. However, you should still self-report Missouri gambling winnings or losses because that amount counts as income and could actually help count as a deduction and lower your taxable income if the latter occurs. More info on how to receive a tax deduction on MO gambling losses can be found below.
What Happens If You Forget To Report Gambling Losses in Missouri?
If you forget to report your gambling losses, you are only hurting yourself and preventing the possibility of reducing your Missouri gambling taxes. If you had any gambling winnings, you would not be able to lower the tax liability by subtracting the losses if you fail to report them.
That is why it is always important to keep accurate and detailed records in order to figure out exactly what you owe for Missouri gambling taxes. Itemize them appropriately on your tax form, and you may even need to provide proof of your wins and losses in case you get audited. Most of the Missouri betting apps will provide you with this information as well.
Can I Deduct Gambling Losses in Missouri?
Yes, you can deduct gambling losses in Missouri as long as they are itemized on your 1040 tax return form. You should keep a record of all your gambling wins and losses and then subtract the latter from the former to see if you might qualify for a deduction. If not, the losses can still be used to lower the amount of taxes you owe on your winnings by subtracting them in similar fashion. Regardless, itemizing them on Schedule A of your 1040 form is the key.
What If I Lost More Than I Won Gambling?
With gambling, there is always the possibility that you can lose more than you win, and that is the case more often than not. If you do lose more than you win while gambling in MO, you could qualify for a tax deduction as long as you itemize this on Schedule A of your 1040 form.
Missouri Lottery Taxes
Missouri lottery state taxes are quite simple, as you have to pay at a 4 percent rate on any winnings over $600. And any prizes of more than $5,000 require a 24 percent federal tax.
How Are Group Lottery Wins Taxed in Missouri
Group play is a very popular practice when buying lottery tickets, and Missouri is no exception. If you are playing the lottery in a group, it is important to map out the rules in writing beforehand so everyone is held responsible for a potential winning situation.
For example, if your group ticket wins more than $600, all members should plan on covering their share of the 4 percent in state taxes rather than having one person take on that burden alone. Your group could also be responsible for 24 percent in federal taxes on top of that for wins of over $5,000, and it would be unfair for the buyer of the ticket to foot the bill on his/her own. While paying taxes is often viewed negatively, it is also a good problem to have as a winner.
Taxes on Multi-State Lottery Wins
Multi-state lottery wins on games like Powerball or Mega Millions are taxed at the highest rate of 37 percent if you take the lump sum and the amount won is more than $500,000. If you are fortunate to win that much money, 24 percent will be taken off the top right away for federal taxes just like with any lottery winnings, then the difference (13 percent) will be collected later at tax time. You must also pay the 5.4 percent state tax rate on those winnings. If you decide not to take the lump sum though and spread the payments out with the annuity option, you can cut down the tax burden and spread it out on an annual basis instead.
Will I Have to Pay Taxes on Sports Betting Winnings?
Bettors are eagerly anticipating the launch of betting and Missouri sportsbook promos. What they might not be thinking about is the tax side of things. Although nothing has been made legal, and there is no written legislation regarding taxes on sports betting in Missouri, we can almost say with certainty that you will be expected to pay taxes.
What Happens If I Don’t Report My Gambling Winnings?
Failure to report gambling winnings -- especially if they end up being a significant amount -- can turn out to be a serious offense. That is why using the Missouri gambling tax calculator is so important. The Missouri gambling tax calculator is a free tool that does the work for you in terms of helping you estimate what you will eventually owe. If you do not report your gambling winnings, you may be subject to paying penalties and fines on top of the taxes owed. Criminal charges could be brought against you as well, both on a state and federal level.
Remember, the last thing you want to do after winning a significant amount of money by gambling is pay an even more significant price in penalties, fines and taxes than you would have to if you just followed the rules in the first place. Missouri gambling taxes are no joke, and you will want to take them seriously to avoid paying a potentially higher price in the long run if you ignore them. Using the Missouri gambling tax calculator can help make that easier.
Missouri Gambling Winnings Tax Calculator FAQ
Gambling losses are defined as any amount of money you lost on gaming, including the lottery, keno, table games and others played on electronic gaming devices. To determine Missouri gambling taxes, you would subtract the amount of losses from the amount of winnings. If the losses are bigger than the winnings, you could itemize them as a deduction on your tax form.
You can use the helpful Missouri gambling tax calculator within this article to figure out how much you might owe based on the total amount of winnings and your total income overall.
On single gambling wins, you do not have to pay taxes in Missouri if you won less than $600 in the lottery or less than $1,200 on electronic gaming device or table game jackpots. However, you may need to pay Missouri gambling taxes and report as income on your federal tax form as well if the total amount of winnings in a year exceeds the amounts previously mentioned.
You can prove gambling losses on your taxes in Missouri and possibly count them as a deduction if they are itemized properly on Schedule A of your 1040 tax form.
Gambling winnings are automatically taxed in Missouri at a rate of 4 percent on a single win like the lottery or a jackpot. Otherwise, MO gambling winnings are taxed as income at the state rate of 5.4 percent if the total amount earned is $8,969 or higher. The state tax rate may be lower if the total income amount is $8,968 or less, so make sure to reference the table above.
Gambling losses are tax deductible in Missouri if you itemize your deductions on Schedule A of your 1040 tax form and keep record of your winnings and losses to back it up accordingly.
Author
Matty Simo is a Las Vegas-based writer who has resided there for more than 20 years and covered sports since the age of 16 in suburban Chicago.
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