Legendz brings some of the most exciting offerings to the table. However, there is one thing that every US player must consider when engaging in online gaming activities — taxes. The good news is that there are no Legendz taxes.
But hold on; taxes are not completely out of the picture. Remember that your winnings at regular online casinos and sportsbooks are taxable. Well, the same applies to Legendz. And yes, Legendz is not a regular gaming site, so we created this guide to help you understand how taxes apply on the platform.
No, Legendz does not charge you any taxes. You’re not paying anything extra, even for purchases and redemptions. However, taxes will apply to the winnings you make from the sweepstakes brand as long as you reside in one of the states where Legendz is legal.
The reason for this is quite straightforward – Federal and state taxes apply to all casino winnings. Yes, Legendz is a sweepstakes brand, but that does not exempt it from this rule. So, if you’ve accumulated up to $600 after redemptions, you must report it to the Internal Revenue Service (IRS).
“Accumulated” is the keyword here. You might make your redemptions in bits — $50, $150, $200, and the like. It doesn’t matter how much you get at a time. The most important thing to keep in mind is that you will pay taxes if the accumulated amount is up to $600.
Taxes are not specific to Legendz. You’ll still have to file tax reports even if you play at other sweepstakes casinos and sportsbooks. That said, you have to pay the flat rate of 24%, which is implemented at the Federal level. To give a clearer example, if you exchange up to $1,000, you’re remitting $240 to the IRS.
However, you must also consider state laws. That’s because some regions have a much lower rate compared to the Federal 24%. For instance, it’s 10% in Colorado and 20% in Tennessee. On that note, learn the tax rate that applies in your region to know how much taxes you’ll pay based on your winnings.
Preparing your Legendz taxes is easy. You start by noting your wins, then you get the necessary form and fill out your details. Below is a more detailed breakdown of how to complete the process:
Attach the Schedule 1 form and file your tax return: Once you’ve completed Schedule 1, attach it to Form 1040 and submit it. If you obtained a hardcopy form, you can mail it to the IRS.
Both the W-2G and Form 1040 are essential in the US tax system. However, they function differently. Here’s a simple overview of each one:
| W-2G | This is specifically to report your winnings from online gaming, but it is issued by the sweepstakes gaming establishment. |
| Form 1040 | The Form 1040 is more comprehensive and you complete it yourself. |
Now, Legendz leaves taxes to the player, so it doesn’t issue W-2G forms. This means it’s your responsibility to fill out the “Other Income” section of Schedule 1 when you’re preparing your annual income tax returns.
The sweepstakes casino is only responsible for ensuring that you’re who you say you are. It achieves this by requesting KYC verification from all its players. This process also shows that the platform is safe, which is one reason our Legendz rating is high.
Below are a few approaches that will make it easier for you to prepare and handle your Legendz taxes:
Legendz has a page where you can track your redemptions, your Legendz promo codes (if any), and referral bonuses. You can also keep your personal records and crosscheck these details when preparing your report.
Taxes can easily accumulate over time and become significant amounts. That’s why we recommend setting aside your tax amount after every redemption. This way, your tax amount won’t eat deep into your pocket.
A 5% fee applies to your unpaid taxes. You can avoid these extra charges by paying your taxes yearly and on time.
Here are the advantages and drawbacks to note about taxes you pay for your redemptions:
Legendz doesn’t charge you taxes, and you won’t even have to pay anything extra when redeeming Sweeps Coins for real money. However, paying taxes is one thing you cannot avoid as a US player. So, you still have to report your redemptions. The exact percentage you must pay depends on your location.
No, you don’t have to pay taxes on Legendz, but you must still pay taxes on the cash prizes you get on the platform.
You can pay your taxes using payment methods like bank transfers, debit cards, credit cards, and e-wallets.
No, you don’t include your purchases when filling out Form 1040. That’s because you only have to pay taxes on your redemptions (winnings), not your purchases.
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