Whether you roll the dice in Wendover or beyond, bet on the ponies at Wyoming Downs or take a chance at a slot machine in Mesquite, Nev., the Internal Revenue Service wants to remind gamblers that winnings are fully taxable and must be reported on your income tax return.
You can deduct your losses, but only up to the extent of your winnings. For example, if you win $200 but lose $300, you can only take a $200 deduction.
Here are five tips from the IRS about gambling and taxes.
• 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 vacations.
• On winnings above certain amounts, 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.
• Generally, you report all gambling winnings on the "Other income" line of Form 1040.
• You can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under the "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.
• 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.
For more information on gambling income and losses, see IRS Publication 529, Miscellaneous Deductions, or Publication 525, Taxable and Nontaxable Income. Both publications are available at www.irs.gov, or by calling 800-829-3676.
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