The requirements for the reporting of and withholding from your winnings depend on the type of gambling, the amount won, and the ratio of the winnings to the wager.
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When you pocket $600 or more (or 300 times your bet) at a horse track, win $1,200 at bingo or a slot machine, or take $1,500 or more from a keno game, the payer must get your Social Security number and notify the IRS that you came into the extra income.
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In addition, if you win $5,000 or more on a gambling transaction, you probably won’t walk away with all the cash. In this case, in addition to reporting your winnings to the IRS, the payer in most cases must withhold federal taxes at the 27-percent rate.
If you refuse to furnish your Social Security number, the payer could take as much as 30 percent of your winnings right off the top to send to the IRS. In either instance, you'll get a Form W-2G (Certain Gambling Winnings), showing the amount you won and, if applicable, how much in taxes have been withheld.
Even if you didn't win enough to require a W-2G filing, you still have to report those gambling winnings. Just because the casino or track or lottery agent didn't report that $25 dollars you won doesn't mean it's not taxable. It's your responsibility to report your winnings, from the W-2G or those smaller jackpots, on line 21 (Other Income) of Form 1040. In addition to gambling proceeds, this is where you'd also report any prizes or awards (cash or cash-value) you won. All this money goes toward your adjusted gross income.
Hold on to those losing tickets, because if you lost money before you won, there's a way you can turn those losses to your tax advantage. You won't have to pay taxes on all that AGI if you reduce it through claiming deductions, either the standard amount or itemized. Compare to see if itemizing would provide a larger deduction than claiming the standard one
If you have large gambling winnings and losses, itemizing may be preferable. You would enter your gambling losses on line 27 (Other Miscellaneous Deductions) of Schedule A Form 1040, Itemized Deductions.
Keep a record of any gambling losses you're deducting. You won’t have to send them as part of your return, but documentation will be needed if the IRS ever questions your losses. Acceptable gambling loss record keeping could include a written log detailing the date of your wagers, the location, amount bet, type of gaming, and wins and losses. You should also hang on to losing lottery tickets, bet slips, and bingo cards.
The good thing about deducting gambling losses is that, unlike some other deductions, you don't have to meet a certain level before you can claim them. But you can only count as much in losses as you won. So if you spent $100 on lottery tickets in a year and won $75 in the same year, you can only deduct $75. The other $25 is just part of the price of playing the game.
IRS
*
When you pocket $600 or more (or 300 times your bet) at a horse track, win $1,200 at bingo or a slot machine, or take $1,500 or more from a keno game, the payer must get your Social Security number and notify the IRS that you came into the extra income.
*
In addition, if you win $5,000 or more on a gambling transaction, you probably won’t walk away with all the cash. In this case, in addition to reporting your winnings to the IRS, the payer in most cases must withhold federal taxes at the 27-percent rate.
If you refuse to furnish your Social Security number, the payer could take as much as 30 percent of your winnings right off the top to send to the IRS. In either instance, you'll get a Form W-2G (Certain Gambling Winnings), showing the amount you won and, if applicable, how much in taxes have been withheld.
Even if you didn't win enough to require a W-2G filing, you still have to report those gambling winnings. Just because the casino or track or lottery agent didn't report that $25 dollars you won doesn't mean it's not taxable. It's your responsibility to report your winnings, from the W-2G or those smaller jackpots, on line 21 (Other Income) of Form 1040. In addition to gambling proceeds, this is where you'd also report any prizes or awards (cash or cash-value) you won. All this money goes toward your adjusted gross income.
Hold on to those losing tickets, because if you lost money before you won, there's a way you can turn those losses to your tax advantage. You won't have to pay taxes on all that AGI if you reduce it through claiming deductions, either the standard amount or itemized. Compare to see if itemizing would provide a larger deduction than claiming the standard one
If you have large gambling winnings and losses, itemizing may be preferable. You would enter your gambling losses on line 27 (Other Miscellaneous Deductions) of Schedule A Form 1040, Itemized Deductions.
Keep a record of any gambling losses you're deducting. You won’t have to send them as part of your return, but documentation will be needed if the IRS ever questions your losses. Acceptable gambling loss record keeping could include a written log detailing the date of your wagers, the location, amount bet, type of gaming, and wins and losses. You should also hang on to losing lottery tickets, bet slips, and bingo cards.
The good thing about deducting gambling losses is that, unlike some other deductions, you don't have to meet a certain level before you can claim them. But you can only count as much in losses as you won. So if you spent $100 on lottery tickets in a year and won $75 in the same year, you can only deduct $75. The other $25 is just part of the price of playing the game.
IRS
these two accountant from vegas wrote the book on it, here's a recent article ty them from cardplayer.com
http://www.cardplayer.com/?sec=afeature&art_id=13444
http://www.cardplayer.com/?sec=afeature&art_id=13444
i am more interested in online gambling...
i have a few questions:
1. if i wait to withdraw my winnings from online pokerrooms or sportsbooks, do i not claim the winnings till i actually withdraw?
I am condidering not withdrawing till the start of 2004 that way i can claim them for next year..
2. Will they see all the moving around of money in my neteller and try to tell me I owe tons of money? I have a ton of transactions from book to book etc. for middling or whatever and if i report my true winnings, is there a chance they will audit me and claim i owe way more?
I am actually worried about getting screwd not trying to cheat.
i have a few questions:
1. if i wait to withdraw my winnings from online pokerrooms or sportsbooks, do i not claim the winnings till i actually withdraw?
I am condidering not withdrawing till the start of 2004 that way i can claim them for next year..
2. Will they see all the moving around of money in my neteller and try to tell me I owe tons of money? I have a ton of transactions from book to book etc. for middling or whatever and if i report my true winnings, is there a chance they will audit me and claim i owe way more?
I am actually worried about getting screwd not trying to cheat.
Tekari- What I have found in years where I won at the racetrack and had to sign IRS slips, was when you do your taxes that year---Jackson-Hewlett, has to write down where the "cretain Gambling winnings" came from. (So in the case of internet wagering, would we list Neteller, with their address?? That's the only way that I would know. Not from Sportsbook A or book B or book C, etc). What I am saying is that it lists name and address of where and Neteller is the only way I know.
A good read on this topic is "The Tax Guide for Gamblers", which is a 40 page read that covers everything a gambler needs to know at tax time. It's available at the Gamblers Book Store in Vegas, and you can also ordr it on-line via the internet if you go to their web site. It costs $30. Written by Roger Roche.
http://www.courthousenews.com/2011/03/23/35177.htm
Wednesday, March 23, 2011Last Update: 6:51 AM PT
Couple's $500K Gambling Loss Decduction Won't Fly
By JEFF D. GORMAN
(CN) - An Illinois couple must pay taxes on their gambling winnings, but they cannot claim their losses as deductions, a state appeals court ruled.
Because the Illinois Department of Revenue found that Jerry and MaryLou Byrd visited casinos as recreational gamblers, rather than as part of a business, it would not let them write off their losses for the tax years 1999 through 2002.
The Byrds did most of their gambling at the slot machines of the Hollywood Casino in Aurora and the Grand Victoria Casino in Elgin.
A trial court agreed with the department that the Byrds owed an additional $60,382 in state taxes, despite having incurred $437,977 in gambling losses during that period.
Illinois' second appellate district court, based in Elgin, affirmed the lower court's ruling.
"We conclude that, because the evidence shows that the Byrds did not devote themselves full-time to gambling but that Jerry Byrd continued to work full-time in the graphic arts industry, where he drew a comfortable salary that supported the Byrds' gambling, there was no clear error in the department's determination that the Byrds' gambling activity was a pastime, not a trade or business," Judge Joseph Birkett wrote on behalf of the court.
Wednesday, March 23, 2011Last Update: 6:51 AM PT
Couple's $500K Gambling Loss Decduction Won't Fly
By JEFF D. GORMAN
(CN) - An Illinois couple must pay taxes on their gambling winnings, but they cannot claim their losses as deductions, a state appeals court ruled.
Because the Illinois Department of Revenue found that Jerry and MaryLou Byrd visited casinos as recreational gamblers, rather than as part of a business, it would not let them write off their losses for the tax years 1999 through 2002.
The Byrds did most of their gambling at the slot machines of the Hollywood Casino in Aurora and the Grand Victoria Casino in Elgin.
A trial court agreed with the department that the Byrds owed an additional $60,382 in state taxes, despite having incurred $437,977 in gambling losses during that period.
Illinois' second appellate district court, based in Elgin, affirmed the lower court's ruling.
"We conclude that, because the evidence shows that the Byrds did not devote themselves full-time to gambling but that Jerry Byrd continued to work full-time in the graphic arts industry, where he drew a comfortable salary that supported the Byrds' gambling, there was no clear error in the department's determination that the Byrds' gambling activity was a pastime, not a trade or business," Judge Joseph Birkett wrote on behalf of the court.
