Question: I've heard that if I win more than $1,200 at any one time in a casino, the casino will give me some kind of tax form which has to be filled out so the government can tax me on my winnings. Is this rule in place for every single kind of win, or only slot machine wins? The reason I ask is that I frequently bet on sports at a casino sports book, and I'm wondering if it might be better to only make bets that will pay out less than $1,200 if I win.

It's been said there there are only two certainties in life – death and taxes. The honest truth is that you can't escape paying taxes; as much as you may feel like gambling winnings are free money, Uncle Sam wants his cut too.

Under US law, any income, no matter what the source (work, investments, inheritance, gambling, etc.) is subject to taxation. In fact, tax code states that all gambling winnings, no matter where you are in the world, must be reported as income on your annual 1040 tax form. This technically applies to all winnings, whether you win a $1 million jackpot or win $1 on a lottery ticket.

Sports bets are not immune from taxation, either. It doesn't matter to the IRS if you won a $200 Super Bowl bet at a casino sports book or from your cousin; in both cases it counts as income. The only upside of this is that you are able to write off gambling losses from your taxes, as long as they do not exceed your winnings. So, if you win $500 this week betting on the Giants, but lose $500 next week betting on the Cowboys, you can offset the winnings with the losses and not pay any extra taxes.

Of course, out in the real world, a large portion of people usually don't report their gambling winnings as income, especially if they are relatively small. Realistically, no one will care if you don't report the $10 you won on the penny slots or the $5 bet you had with your sister over who will win the World Series.

But the men and women of the IRS are not stupid, and they know that people often try to avoid paying all the taxes they are required to, especially when gambling winnings are concerned. That is why there are laws which automatically trigger a paper trail in the form of a W2-G if you win more than a certain amount at once. The W2-G form, if required, is kept and filed by the casino or betting authority itself, meaning that you can't just throw it away after you get it.

The $1,200 number is correct, if we are talking about winnings received from a single slot machine or bingo win. For keno, the win must be in excess of $1,500 to trigger a W2-G. Unfortunately for those who like to bet on sports, a W2-G must be filed for any sports, horse racing, dog racing, or state lottery win in excess of $600, or 300 times the initial wager, whichever is lower.

Table players can rejoice, though, in that casinos are not required to issue W2-G forms for winnings made at blackjack, roulette, craps, pai gow, three-card poker, baccarat and other table games, no matter how large the winnings. But for those of you high rollers out there, if you make more than $10,000 in cash transactions at a casino in a day, they are required to report it under separate money-laundering laws.

Tax evasion is a serious crime with serious consequences, so if you ever win big at gambling, it is far better to simply report it and pay the taxes on it. And if you ever do have to fill out a W2-G, you should actually feel happy – you won!