Whether you like to gamble on horses, or play online dice games, or pull the slots, the money you won from gambling is actually taxable. Your gambling income must be reported on your income tax return. If you’re an occasional gambler, then your chances are good with these basic tax tips that can help you this year.
Income from Gambling
The income you get from gambling basically includes the money you earn from winning lotteries, horse betting, and casinos as well. This also includes the cash prizes and the market value of the non-cash prizes such as trips and cars.
Tax Forms for Payers
If you win from gambling, you should submit the W-2G form; note that the IRS will need a copy of this form as well. The payer will be issuing this form in accordance to the type of game they’ve played and the amount or value of the prize and other factors as well.
Reporting the Amount and Value of the Prize
Whatever prize or value you have won from gambling should be reported as part of your income. This holds true even though you haven’t received a W-2G form. According to the law, all your winnings for the entire years should always be reflected on your tax return, under the “other income” category.
Reporting the Losses for Deduction
It is important to note that not only will you report your winnings to the IRS; you should also report your losses as well. Losses should be reflected on the Schedule A portion of the form. The total amount that you should deduct will largely depend on the amount reflected on your gambling income report of your income tax returns.
Always Keep Gambling Receipts
It is very important that you should keep track and monitor all your wins and losses. This would include receipts, gambling logs, statements, as well as tickets.