Gambling winnings are fully taxable and must be reported on your tax return. Here are the top seven facts the Internal Revenue Service
wants you to know about gambling winnings.
-- Gambling income includes – but is not limited to – winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other noncash prizes.
-- Depending on the type and amount of your winnings, the payer might provide you with a Form W-2G
and may have withheld federal income
taxes from the payment.
-- The full amount of your gambling winnings for the year must be reported on line 21 of IRS Form 1040
. You may not use Form 1040A
or 1040EZ. This rule applies regardless of the amount and regardless of whether you receive a Form W-2G or any other reporting form
-- If you itemize deductions
, you can deduct your gambling losses for the year on line 28 of Schedule A
, Form 1040.
-- You cannot deduct gambling losses that are more than your winnings.
-- It is important to keep an accurate diary or similar record of your gambling winnings and losses.
-- To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.