Gambling Income And Expenses Tax Requirements

Gambling Income and Expenses - Tax Requirements
Hit a​ big one? With more and more gambling establishments,​ keep in​ mind the​ IRS requires people to​ report all gambling winnings as​ income on​ their tax return.
Gambling income includes,​ but is​ not limited to,​ winnings from lotteries,​ raffles,​ horse and dog races and casinos .​
Unfortunately,​ gambling income also includes the​ fair market value of​ prizes such as​ cars,​ houses,​ trips or​ other non-cash prizes.
Generally,​ if​ you​ receive $600 ($1,​200 from bingo and slot machines and $1,​500 from keno) or​ more in​ gambling winnings and your winnings are at​ least 300 times the​ amount of​ the​ wager,​ the​ payer is​ required to​ issue you​ a​ Form W-2G .​
If you​ have won more than $5,​000,​ the​ payer may be required to​ withhold 25 percent of​ the​ proceeds for Federal income tax .​
However,​ if​ you​ did not provide your Social Security number to​ the​ payer,​ the​ amount withheld will be 28 percent.
The full amount of​ your gambling winnings for the​ year must be reported on​ line 21,​ Form 1040 .​
If you​ itemize deductions,​ you​ can deduct your gambling losses for the​ year on​ line 27,​ Schedule a​ (Form 1040) .​
You cannot deduct gambling losses that are more than your winnings.
It is​ important to​ keep an​ accurate diary or​ similar record of​ your gambling winnings and losses .​
To deduct your losses,​ you​ must be able to​ provide receipts,​ tickets,​ statements or​ other records that show the​ amount of​ both your winnings and losses.
Face it,​ the​ IRS gets you​ coming and going .​
Well,​ I’m off to​ play poker.

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