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

  • Like Kind Exchange

    If you are disposing of property used in your business, you may want to consider a like-kind exchange to defer the taxable gain on the sale.
Saturday, 17th February 2018
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Tax Tips Personal

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    New rules require diligent recordkeeping
    Keeping the receipts from your charitable contributions just became more of a priority. Starting January 2007, you will not be allowed to deduct charitable contributions of any amount unless you have the proof. What does this mean for you? Starting in 2007,

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Personal Quick Tip

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