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From the IRS Summer Series – Tips on Gambling Income and Losses

IRS-Whether you roll the dice, bet on the ponies, play cards or enjoy slot machines, you should know that as a casual gambler, your gambling winnings are fully taxable and must be reported on your income tax return. You can also deduct your gambling losses…but only up to the extent of your winnings.

Here are five important tips about gambling and taxes:

1. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes such as cars and trips.

2. If you receive a certain amount of gambling winnings or if you have any winnings that are subject to federal tax withholding, the payer is required to issue you a Form W-2G, Certain Gambling Winnings. The payer must give you a W-2G if you receive:

$1,200 or more in gambling winnings from bingo or slot machines;
$1,500 or more in proceeds (the amount of winnings minus the amount of the wager) from keno;
More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament;
$600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or
Any other gambling winnings subject to federal income tax withholding.
3. Generally, you report all gambling winnings on the “Other income” line of Form 1040, U.S. Federal Income Tax Return.

4. You can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under ‘Other Miscellaneous Deductions.’ You must report the full amount of your winnings as income and claim your allowable losses separately. You cannot reduce your gambling winnings by your gambling losses and report the difference. Your records should also show your winnings separately from your losses.

5. Keep accurate records. If you are going to deduct gambling losses, you must have receipts, tickets, statements and documentation such as a diary or similar record of your losses and winnings. Refer to IRS Publication 529, Miscellaneous Deductions, for more details about the type of information you should write in your diary and what kinds of proof you should retain in your records.

For more information on gambling income and losses, see IRS Publication 529, Miscellaneous Deductions, or Publication 525, Taxable and Nontaxable Income, both available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

Publication 525, Taxable and Nontaxable Income
Publication 529, Miscellaneous Deductions
Tax Topic 419, Gambling Income and Expenses
Form W-2G, Certain Gambling Winnings
YouTube Videos:

Miscellaneous Income – English | Spanish | ASL
Record Keeping – English | Spanish | ASL

Stacie’s More Tax Tips Makes a Top Something or Other List

By Stacie Clifford Kitts, CPA

Seems like I am always reading someones top something… tax/accounting/business  list and it always makes me wonder – just how does someone get on this list anyway?????

Like for example take  Accounting Today/Tomorrow/WebCPA.  This group publishes a top 100 most influential people in the accounting industry list.  Every year I read it over and wonder –  how do they decide who is “most influential” anyway?  I mean really, is this a scientific thing?  Are there compliance criteria – like a PPC guide “How to Determine the Most Influential People in Accounting” – we are talking about accountants here – I assume there’s a checklist?

I do hope its more scientific than just a bunch of journalists sitting around a conference table, sipping coffee and munching on donuts while someone writes names on a white board.   Just picture it, a bunch of bored staff writers some twisting slightly in their chairs, some lounging about, others lazily calling out names.  Then someone says, “hey cross off Sally Johnson, she was rude to me at blah blah conference. she doesn’t make it this year.” Yowser,I hope it doesn’t work like that!!!

Recently, I’ve been contacted by a “.com site” or two.  These sites were letting me know that I could be listed on a top something list….so –be sure to mention it at Stacie’s More Tax Tips- wont you?

While I get how this whole quid pro quo thingy works, I have declined 100% of the “link to us, we’ll link to you” offers.  I’ve even turned down click for payment offers because I didn’t think the link topics where appropriate for my my site.

But you know what, I’ve decided that gosh darn my blog is interesting.. And yes siree, I deserve to be on a top anything list.. And, it has absolutely nothing to do with quid pro quo.  Nope, they of course see the genius that is my blog and feel compelled to share. So thanks to bschool.com for naming Stacie’s More Tax Tips in the 50 best Blogs to Get You Through Tax Season.

Oh by the way, the picture is of me and the grandbaby enjoying Christmas day with the family!

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