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You, as a taxpayer, must report all gambling winnings as income. You must be able to itemize to claim any gambling losses on your return.

Taxpayers who gamble may find these tips from the IRS helpful:

  1. Gambling Income. Income from gambling 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 IRS.
  2. Payer tax form. The payer may issue a Form W-2G, Certain Gambling Winnings, to winning taxpayers based on the type of gambling, the amount you win and other factors. The payer also sends a copy of the form to the IRS. Taxpayers should also get a Form W-2G if the payer withholds income tax from your winnings.
  3. How to Report Winnings.  Taxpayers must report all gambling winnings as income. You normally should report all gambling winnings for the year on your tax return as “Other Income.” This is true even if you do not get a Form W2-G.
  4. How to Deduct Losses.  Taxpayers are able to deduct gambling losses on Schedule A, Itemized Deductions, but keep in mind, you can’t deduct gambling losses that are more than your winnings.
  5. Keep Gambling receipts. Keep records of gambling wins and losses. This means gambling receipts, statements and tickets or by using a gambling log or diary.

For more information, see IRS Publication 525 or 529. Feel free to contact our office at 860-274-1655 for assistance.

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