Here are some reminders from the IRS about what to do with your gambling winnings and losses:
# 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.
# The full amount of your gambling winnings for the year must be reported on line 21 of IRS 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.
# If you itemize deductions, you can deduct your gambling losses for the year on line 28 of 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.
There you have it. As fate would have it, I was asked a question about gambling and taxes yesterday afternoon, and decided to look this up. I thought it might be of interest to others.
