IRS Tax Tip 2009-34 reminds taxpayers that gambling winnings are always taxable. Gambling
winnings are fully taxable and must be reported on your tax return.
Gambling income includes, but is not limited to, winnings from
lotteries, raffles, horse and dog races and casinos, as well as the
fair market value of prizes such as cars, houses, trips or other
noncash prizes. Depending on the type and amount of your winnings,
the payer might provide you with a Form W-2G and may have withheld
federal income taxes from the payment. Here are some general
guidelines on gambling income and losses:
Posted by Kya Blackstone, Associate Editor, Wealth Strategies Journal.
- Reporting winnings: The full amount of your gambling winnings for the year must be reported on line 21, Form 1040. You may not use Form 1040A or 1040EZ. This rule applies regardless of the amount and regardless of whether you receive a Form W-2G or any other reporting form.
- Deducting
losses: If you itemize deductions, you can deduct your gambling losses
for the year on line 28, Schedule A (Form 1040). You cannot deduct
gambling losses that are more than your winnings.
Posted by Kya Blackstone, Associate Editor, Wealth Strategies Journal.
Leave a comment