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Reporting Gambling Income and Losses on Your Tax Return

October 5, 2015

If you play the ponies, play cards or pull the slots, your gambling winnings are taxable. You must report them on your tax return. If you gamble, these tips can help you at tax time next year:

Gambling Income. Income from gambling includes winnings from the lottery, horse racing and casinos. It also includes cash and non-cash prizes. You must report the fair market value of non-cash prizes like cars and trips.

Reporting Forms. If you win, the payer may give you a Form W-2G, Certain Gambling Winnings. The payer also sends a copy of the W-2G to the IRS. The payer must issue the form based on the type of gambling, the amount you win and other factors. You’ll also get a form W-2G if the payer must withhold income tax from what you win.

How to report gambling winnings. I will normally report your winnings for the year on your tax return as “Other Income.” You must report all your gambling winnings as income. This is true even if you don’t receive a Form W-2G.

How To Deduct Gambling Losses. I will deduct your gambling losses on Schedule A, Itemized Deductions. You must itemize by filing a Schedule A to deduct gambling losses. The amount you can deduct is limited to the amount of the gambling income you report on your return. You can’t deduct losses if you don’t have any winnings!

Keep Gambling Receipts. You should keep track of your wins and losses. This includes keeping items such as a gambling log or diary, receipts, statements or tickets.