You have to use Form 1040 to report your gambling winnings and losses.
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For those who had a profitable night time at the slots or poker tables, you are going to must share a few of the fortunate proceeds with Uncle Sam. The interior Revenue Service generally requires that you report your playing winnings and losses separately while you file your taxes fairly than combining the 2 quantities.
Record Keeping
As you gamble during the year, you need to maintain information of your winnings and losses as a way to support whatever figures you report in your taxes. The IRS permits you to use per-session recording, which means that instead of recording whether you won or misplaced each time you pull the slot machine, you may merely record your whole for the session. Your data should embrace the date and type of gambling, where you gambled and if you gambled with anybody else, corresponding to a house poker recreation. When you win greater than $600, it is best to obtain a Form W-2G from the casino.
Taxable Winnings
When figuring your gambling winnings, solely include the winnings from each session somewhat than using losses to offset your features. You will have to incorporate gambling winnings even when you didn’t obtain a Form W-2G from the casino. For example, when you gambled six occasions during the year, profitable $100, $3,000, $4,000 and $6,000 however losing $5,000 and $2,000, your gambling winnings for the yr are $13,100. This quantity gets reported on line 21 of your Form 1040 tax return.
Gambling Losses
To say your playing losses, it’s a must to itemize your deductions. Gambling losses are a miscellaneous deduction, however — in contrast to some other miscellaneous deductions — you’ll be able to deduct your entire loss. The deduction goes on line 28 of Schedule A and you’ve got to notice that the deduction is for gambling losses. For instance, in the event you misplaced $5,000 on one occasion and $7,000 on one other, your complete deduction is $12,000.
Gambling Loss Limitation
You can’t deduct more in gambling losses than you’ve got in gambling winnings for the 12 months. For instance, suppose you reported $13,000 in gambling winnings on Line 21 of Form 1040.
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