Gamblers should be aware of the filing and withholding requirements for reportable gambling winnings, which includes wages of $600 or more in winnings, “identical wagers,” and wagers in “single parimutuel pools.” Filing requirements for Form W-2G are discussed in this article.
What is Form 5754?
Form 5754 is a form used by the IRS when the person receiving gambling winnings is not the actual winner, or if a group of people are sharing the winnings. This form requires the winner to provide a statement to the payer and withholds 24% of the proceeds if the winnings minus the wager exceed $5,000 and the winnings are at least 300 times the wager. Additionally, when multiple bets are made in a single parimutuel pool, they must beaggregated to determine the amount of the wager for withholding and reporting purposes.
IRS Form 5754 – Who Needs to Fill It Out?
IRS Form 5754 should be filled out by any person receiving gambling winnings who is not the actual winner, or part of a group of winners. This form is also required for persons receiving winnings of $600 or more from horse racing, dog racing, jai alai, or other wagering transactions, when winnings are at least 300x the amount wagered. The winner must sign Form W-2G, under penalties of perjury, and provide a TIN. Withholding is generally 24% for winnings minus the wager that exceed $5,000. If wagers are placed with the same payer in the same parimutuel pool, or multiple wagers are placed in a single parimutuel pool, they must be aggregated and treated as a single wager to determine the amount for withholding.
Step-by-Step: Form 5754 Instructions For Filling Out the Document
Filling out Form 5754 requires certain steps. First, if the person receiving the winnings is not the actual winner or part of a group of winners, specific instructions for Form 5754 must be referenced. Second, statements to winners must also be provided if they are required to file Form W-2G. Third, for all wagering transactions which are not discussed later, Form W-2G must be filled out for every person receiving $600 or more in gambling winnings which is at least 300 times the amount of the wager. Fourth, withholding of federal income tax is required if total winnings minus the wager exceeds $5,000 and is 300 times the wager. Finally, all winnings from “identical wagers” must be reported and all wagers in a single parimutuel pool must be aggregated for both reporting and withholding.
Below, we present a table that will help you understand how to fill out Form 5754.
| Step | Description |
|---|---|
| 1 | If the person receiving the winnings is not the actual winner or part of a group of winners, specific instructions for Form 5754 must be referenced. |
| 2 | Statements to winners must also be provided if they are required to file Form W-2G. |
| 3 | For all wagering transactions which are not discussed later, Form W-2G must be filled out for every person receiving $600 or more in gambling winnings which is at least 300 times the amount of the wager. |
| 4 | Withholding of federal income tax is required if total winnings minus the wager exceeds $5,000 and is 300 times the wager. |
| 5 | All winnings from “identical wagers” must be reported and all wagers in a single parimutuel pool must be aggregated for both reporting and withholding. |
Do You Need to File Form 5754 Each Year?
When it comes to filing Form 5754 for winnings from horse racing, dog racing, jai alai, and other wagering transactions, you must file it for every person to whom you pay $600 or more in gambling winnings, if the winnings are at least 300 times the amount of the wager. Moreover, each person is required to sign Form W-2G and provide a statement to the winner, under penalties of perjury, stating that they are the sole owner and that the information listed on the form is correct. Furthermore, any winnings that are not subject to regular https://www.irs.gov/pub/irs-pdf/iw2g.pdfwagering withholding but the winner does not provide their TIN must have 24% backup withholding. Identical wagers are also added together for reporting and withholding requirements, and all wagers in horse racing, dog racing, or jai alai placed in a single parimutuel pool will be treated as a single wager when it comes to determining the amount of the wager.
Download the official IRS Form 5754 PDF
On the official IRS website, you will find a link to download Form 5754. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 5754
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