How to Claim Gaming Wins and Losses on a Tax Return
Any money you win gambling or wagering is considered taxable income by the IRS. You can deduct gambling losses as job expenses using Schedule C, not Schedule A. Your records should include the date and type of gambling, where you gambled and if you gambled with anyone else, such as a home poker game. Depending upon the amount of your winnings and the type of gambling, the establishment or payer may be required to withhold income taxes. You must report all gambling winnings on your Form You may deduct gambling losses if you itemize your deductions.
Keep adequate records to show how the gambling income and the loss deductions on the tax return were determined. If you won a non-cash prize, the fair market value of the item is shown as income on Form W-2G.
Verify that the reported FMV for items like cars, boats, and campers is the selling price and not the inflated list price. Calculate your total gambling income by adding together all sources of gambling winnings including, but not limited to, amounts reported to you on Form W-2G, raffle prizes and lottery winnings. Report your total gambling winnings in Other Income on Line 21 of your tax return Form You cannot use any other personal income tax returns, such as Form EZ, to report winnings from gambling.
Deduct the amount of your gambling losses as an itemized deduction on Schedule A of Form You cannot subtract your losses from your winnings and report the net difference in income. You also cannot deduct gambling losses that exceed your gambling winnings. Keep an adequate record of your winnings and losses that shows the dates and the types of wagering activities, the location where it took place, persons with you at the time and the amounts that you won or lost.
The following rules apply to casual gamblers who aren't in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn't 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 trips. A payer is required to issue you a Form W-2G.
You must report all gambling winnings on your Form When you have gambling winnings, you may be required to pay an estimated tax on that additional income. For information on withholding on gambling winnings, refer to Publication , Tax Withholding and Estimated Tax.
You may deduct gambling losses only if you itemize your deductions on Form , Schedule A. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. If you're a nonresident alien of the United States for income tax purposes and you have to file a tax return for U.
Nonresident Alien Income Tax Return. Refer to Publication , U. Tax Guide for Aliens , and Publication , U. Tax Treaties , for more information. Also, nonresident aliens of the United States can't deduct gambling losses. To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.
Refer to Publication , Miscellaneous Deductions , for more information. For you and your family. Individuals abroad and more.