- Gambling income includes winnings from
lotteries, raffles, horse races and casinos. It also includes cash and
the fair market value of prizes you receive, such as cars and trips.
- If you win, you may receive a Form W-2G, Certain Gambling Winnings,
from the payer. The form reports the amount of your winnings to you and
the IRS. The payer issues the form depending on the type of gambling,
the amount of winnings, and other factors. You’ll also receive a Form
W-2G if the payer withholds federal income tax from your winnings.
- You must report all your gambling winnings as income on your federal
income tax return. This is true even if you do not receive a Form W-2G.
- If you’re a casual gambler, report your winnings on the “Other
Income” line of your Form 1040, U. S. Individual Income Tax Return.
- You may deduct your gambling losses on Schedule A, Itemized
Deductions. The deduction is limited to the amount of your winnings. You
must report your winnings as income and claim your allowable losses
separately. You cannot reduce your winnings by your losses and report
the difference.
- You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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