Six Tips on Gambling Income and Losses

Whether you roll the dice, play cards or bet on the ponies, all your winnings are taxable. The IRS offers these six tax tips for the casual gambler.

1. Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.

2. If you win, you may receive a Form W-2G, Certain Gambling Winnings, from the payer. The form reports the amount of your winnings to you and the IRS. The payer issues the form depending on the type of gambling, the amount of winnings, and other factors. You'll also receive a Form W-2G if the payer withholds federal income tax from your winnings.

3. You must report all your gambling winnings as income on your federal income tax return. This is true even if you do not receive a Form W-2G.

4. If you're a casual gambler, report your winnings on the "Other Income" line of your Form 1040, U. S. Individual Income Tax Return.

5. You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference.

6. You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.

Tax Tips Small Business

  • Deducting the Business Use of Your Home

    Don't overlook your home office

    If you use a portion of your home for business, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting, and repairs.

    Read more ...

Small Business Quick Tip

  • Personal Use of Vehicle

    If your business owns a vehicle that is available for an employee's personal and business use, the vehicle is nevertheless considered used 100 percent for business on the business tax return. The personal-use percentage is included on the employee's W-2 as additional compensation.
Tuesday, 16th October 2018
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Tax Tips Personal

  • Interest on Summer Recreation May Be Deductible

    Your motor home or boat could yield a deduction

    If you own a boat or motor home that is fully equipped with kitchen and sanitary facilities and you use it as a "second" home, the interest you pay on it is probably deductible on your tax return. Although a fishing boat without facilities won't qualify, most motor homes and campers do. If you're looking to buy a boat that doesn't qualify as a second home, you may want to consider paying for it with a home equity loan. That way, the interest is generally deductible. As with most tax rules, there are exceptions and limits so check with a tax expert before you sign on the dotted line.

Personal Quick Tip

  • Qualified Tuition Plan

    It doesn't appear that a college education will get cheaper any time soon. Look into establishing a qualified tuition plan for your children. The earnings in the account grow tax-free. As long as the funds are spent on qualified education expenses, there are no tax consequences. Plus, there may be an added tax benefit at your state level.