With Mega Millions and the Powerball both over $300 million this week we would like to remind taxpayers that they must report all gambling winnings as income. They can also itemize deductions to claim any gambling losses on their return.
Taxpayers who gamble may find these tips helpful:
- Gambling income includes winnings from the lottery, horse racing, and casinos. It also includes cash and non-cash prizes. Taxpayers must report the fair market value of non-cash prizes like cars and trips to the Internal Revenue Service.
- Winners will receive a W-2G for certain gambling winnings, based on the type of gambling, the amount won and other factors.
- The amount won must be reported as income. This amount should be reported as “Other Income”
- A taxpayer can also deduct gambling losses on Schedule A, Itemized Deductions, but they can’t deduct gambling losses that are more than their winnings. This means that you should keep all of those losing scratch-offs, lottery tickets, gambling receipts, and tickets or keep a gambling log or diary until the end of the year. Even if you only win $1,000, this will allow you to deduct your losses.
For More Information contact us at 561-293-3135 or email info@fasttaxhelp.org.
