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.