IRS Reminds Gamblers to Claim All Winnings
Have you hit a large progressive slots jackpot lately? Or maybe you cleaned house at the blackjack table, or won a parlay bet over the weekend at a Vegas sportsbook. Well, with more and more gambling establishments, online and offline, keep in mind the Internal Revenue Service (IRS) requires people to report all gambling winnings as income on their tax return.
Just recently, the IRS updated a portion of their website concerning income received while gambling. The website explains, "Taxable 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 that are won in casinos.
If you receive $600 ($1,200 from bingo and slot machines and $1,500 from keno) or more in gambling winnings and your earnins 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 total sum of your gambling winnings for the entire 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). One stipulation, you cannot deduct gambling losses that are more than your winnings for that same year.
It is also very important to keep an accurate log 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. The casino establishments will not be able to provide this information to you after the fact.
