Gambling Income and Expenses - Tax Requirements
Below is a MRR and PLR article in category Finance -> subcategory Taxes.
Gambling Income and Expenses: Tax Requirements
Summary:
Hit it big? With the rise in gambling establishments, remember that the IRS requires you to report all gambling winnings as income on your tax return.Article Body:
Did you hit a jackpot? As gambling establishments continue to grow, it's crucial to remember that the IRS mandates reporting all gambling winnings as taxable income.Gambling income includes winnings from lotteries, raffles, horse and dog races, and casinos. It also encompasses the fair market value of non-cash prizes like cars, houses, and trips.
Typically, if your gambling winnings amount to $600 or more ($1,200 from bingo and slot machines, $1,500 from keno) and are at least 300 times the wager, you’ll receive a Form W-2G. For prizes over $5,000, the payer may withhold 25% for federal taxes, or 28% if you haven’t provided your Social Security number.
You must report the total amount of your gambling winnings on line 21 of Form 1040. If you itemize deductions, you can claim your gambling losses on line 27 of Schedule A (Form 1040), but only up to the amount of your winnings.
Keeping an accurate record of your gambling activities is essential. To deduct losses, you need receipts, tickets, or statements showing both your winnings and losses.
In the end, the IRS ensures it gets its share. Off to play poker!
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