- Gambling Winnings Form 1040
- 2018 Form 1040 Gambling Winnings
- Gambling Winning Tax Form
- Report Gambling Winnings On 1040
Amount of your gambling winnings and losses. Any information provided to you on a Form W-2G. The tool is designed for taxpayers that were U.S. Citizens or resident aliens for the entire tax year for which they're inquiring. Gambling winnings include not only the money you win, but the fair market value of any prizes or “comps” you receive as well. If, like the vast majority of people, you’re a casual recreational gambler, you’re supposed to report all your gambling winnings on your tax return every year. Gambling winnings are reported as Other Income on Line 21 of IRS Form 1040. While you may be able to deduct your gambling losses, gambling winnings are not directly offset by gambling losses in your tax return.
If you’re like most people, you dread tax season each year. There’s nothing like the anxiety of wondering if you’re going to owe the IRS. Add to that the stress of figuring out what informationyou’ll need to include and whether it’s coming by mail or electronic delivery, then scheduling time to meet with your tax advisor. Not to mention the added fear of wondering if you’re going tomiss something that will result in penalties and interest, or, even worse, an audit.
Gambling Winnings Form 1040
All of this can combine to create a real headache. Read on to learn some of the basics regarding your gambling winnings and losses and how they affect your individual income tax return. Evenpossessing some general knowledge on the issue can go a long way to reduce stress. Keep in mind that this material is provided for general awareness. For tax planning and advice and more detailedinformation, check out the links provided throughout this post.
It’s also important to note that the information provided here is for casual gamblers only. Professional gamblers will file Schedule C to report winnings and losses from gambling, and that isoutside the scope of this discussion. Most gamblers will have a hard time classifying themselves as professionals, and there may be some reasons why it would not be considered advantageous to doso.
Without any further delay, let’s take a look at 7 things you should know about gambling and your US individual income tax return.
If you lose money gambling, you might be able to deduct it on your tax returns. However, before you can claim the deduction, you'll have to meet two important requirements. First, the IRS will want you to itemize all of your deductions. Second, you can only deduct gambling losses to the extent that you have gambling winnings.
Claiming the Gambling Deduction
The way that you claim the gambling deduction is relatively simple. First, you have to file Schedule A and itemize your tax deductions. This means that you can't claim the standard deduction, but you can write off expenses like your state income tax, mortgage interest, property taxes, car registration tax and charitable donations. If you have gambling losses, you write them off as 'other miscellaneous deductions' on line 28 of Schedule A, where they get combined with your other itemized deductions to reduce your taxable income.
Deduction Rules
The IRS will only let you deduct losses to the extent that you win. For instance, if you lose $3,000 on one trip to the casino and win $2,100 on another trip in the same year, you can write off $2,100 in losses to offset the $2,100 in winnings, leaving you with a total of $900 of taxable gambling income. If you lost $1,000 on one trip and won $9,500 on another, though, you could claim the entire $1,000 in losses to reduce your net income from gambling to $8,500.
2018 Form 1040 Gambling Winnings
Proving Your Gambling
Gambling Winning Tax Form
If you claim a gambling loss deduction, you will have to prove that you are entitled to it. Casinos send a form W-2G when you win to let the IRS know that they paid you, but it's up to you to establish your losses. The IRS requires you to keep tickets or receipts and a diary of your winnings and losses to substantiate your deduction. If you can get a printout from the casino of your gambling activity, such as if you use a player's club card, it may be helpful.
Professional Gambling
The rules for professional gamblers are different. A professional gambler makes a business out of gambling. He can write off his gambling losses and any expenses that he incurs for gambling -- like travel -- to offset gambling income. Since gambling is a business, he would file a Schedule C to report his income and expenses and would also have to pay self-employment taxes on his profits.
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About the Author
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the 'Minnesota Real Estate Journal' and 'Minnesota Multi-Housing Association Advocate.' Lander holds a Bachelor of Arts in political science from Columbia University.
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