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