Were you at Maryland Live or Horseshoe anytime this summer? Or maybe you were with the Ques at their Clave in Vegas hitting the slots. Whichever casino you were at and whether you hit it big or loss big you must indicate it on your taxes. Keep reading for tips on how to claim your losses and winnings on your taxes.
Gambling Winnings
First let’s define gambling income, this income includes but is not limited to: winnings from lotteries, raffles, horse races, casinos, and market values of prizes like cars and trips. If you have gambling income that meets the income threshold for its type of winning then the payer (individual who awarded you the winnings) is required to send you a Form W-2G, which documents your winnings from gambling that are subject to income tax withholdings and also list any taxes that were withheld by the payer. Income thresholds for certain gambling winnings are as follows:
Winnings $1,000 or more from Bingo game or Slot machine
Winnings $1,000 or more from Keno game
Winnings more than $5,000 from Poker tournament
So depending on the type of winnings and the amount or your winnings you may or may not receive a W-2G form the payer.
Gambling Losses
If you weren’t so lucky to cash out and win, you may still be able to recover. Gambling losses are tax deductible! Now before you get too excited you can only deduct losses up to the amount of your winnings. For example if you have $ 1,000 in winnings and $3,000 in losses, you can only deduct up to $1,000 of those losses. So with that, in order for you to report your losses you MUST report your winnings. If you have no winnings you can’t just deduct losses to reduce your tax bill, the purpose of being able to deduct gambling losses is to allow taxpayers to at least avoid paying tax on the gambling winnings. Another stipulation is that gambling losses can only be deducted if you are itemizing your deductions and not taking the standard deduction. Remember, to always keep good records to prove your losses, things like receipts, tickets, statements, etc.