LMAO stands for "Laughing my ass off" and is often used online or in text messaging to indicate that something is funny.

When to use it

People use "lmao" as a casual way to express that something is funny or amusing. It stands for "laughing my ass off." It is commonly used in social media posts, text messages, and online forums.

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Reference:

What Does Lmao Mean?
Lmao is an abbreviation of the phrase “laughing my ass off.” It is used to indicate that something is funny.
Definition of LMAO | Dictionary.com
The definition of Lmao is laughing my (fucking) ass off; laughed my (fucking) ass off (a euphemistic initialism used to avoid explicit vulgarity). See additional meanings and similar words.
lmao
1. abbreviation for laughing my ass off: used, for example on social media and…