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Tag Archive for Gambling Loss

Gambling Winnings And Losses And Dealing With Taxes

Living in Las Vegas, a question I get all the time is “How do I deal with winning and taxes?”  First off, congratulations on winning!  The odds were definitely in your favor.  Second, reporting gambling income so much easier than one would think.  Here on some tips if you are lucky enough to win:

1. Winnings may or may not be reported on Form W-2G, but even if it is not, all winnings must be reported as “other income” on the 1040.

2. Good News! Losses can be deducted up to the amount of winnings. Bad news: Losses are reported on your Schedule A so you have to be able to itemize your deductions.

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Challenges of Taxing Gambling Winnings

Gambling winnings are taxable – include them on line 21 of Form 1040 as other income. You can only deduct your gambling losses if you itemize your deductions (Schedule A). How do you know if you had winnings or losses? Often, it is easy. You buy ten lottery tickets at $1 each and one is a winner, let’s say $500. Of the $500, $1 is considered a return of your investment and is not taxable. So, $499 goes on line 21. The $9 spent for the losing tickets is a loss for Schedule A.

What about a trip to the casinos? or multiple trips during the year? Do you track each bet, such as at a slot machine? That sounds unrealistic. The IRS says a session of play can be the bet. So, start at a machine with $100 and end up with $150 and you have $50 of winnings. Even if that also includes a $1,300 jackpot (for which the casino will give you Read more

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