Gambling winnings should be reported as income on your tax return.
You must itemize deductions to deduct gambling losses, and they can be deducted only up to the amount of any gambling winnings.
If you are a casual gambler, these tax tips can help:
Gambling income. Income from gambling includes
winnings from the lottery, horse racing and casinos. It also includes
cash and non-cash prizes. You must report the fair market value of
non-cash prizes like cars and trips.
Payer tax form. If you win, the payer may give you a Form W-2G,
Certain Gambling Winnings. The payer also sends a copy of the W-2G to
the IRS. The payer must issue the form based on the type of gambling,
the amount you win and other factors. You’ll also get a form W-2G if the
payer must withhold income tax from what you win.
How to report winnings. You normally report your
winnings for the year on your tax return as “Other Income.” You must
report all your gambling winnings as income. This is true even if you
don’t get a Form W-2G.
How to deduct losses. You can deduct your gambling losses on Schedule A,
Itemized Deductions. The total you can deduct, however, is limited to
the amount of the gambling income you report on your return.
- Keep gambling receipts. Keep records of your wins and losses. This means keeping items such as a gambling log or diary, receipts, statements or tickets.
IRS Tax Tips provide valuable information throughout the year. IRS.gov offers tax help and info on various topics including common tax scams, taxpayer rights and more.
Additional IRS Resources:
- Tax Topic 419, Gambling Income and Expenses
For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.
Review-Like-Follow AttorneyBritt On: