Would you have the records to keep your tax bill to a minimum? If you want to discuss the tax implications of your gambling activities, fill out the form on this page or call us at 44.Īs an expert in small business tax services and tax consulting Ken-Mar Tax eats, sleeps and breathes small business tax strategies.

You could win a big jackpot on the last day of the year. Gambling has tax implications and can, for the uninformed, lead to unexpected tax bills and complications. Keep this in mind. If you take the standard deduction, you don’t reduce your tax liability with your gambling losses.ĭon't Let Gambling Winnings Lead to Unexpected Tax Bills

Be aware of itemizing requirements: Remember that you can only deduct gambling losses if you itemize your deductions.

The session approach allows you to offset wins and losses within the same session, potentially reducing your taxable income.

Understand the importance of session tracking: Track your wins and losses by gambling session.

Use a player’s card: Whenever you gamble at a casino, use a player’s card to track your activities electronically.

This record can serve as valuable documentation in an IRS audit.

Keep a gambling log: Maintain a detailed log of your gambling activities, including dates, locations, types of wagers, and amounts won or lost.

Tax Tips and Best Practices for Recreational Gamblers Due to poor recordkeeping and misclassification as a professional gambler, Bright incurred a tax bill of $13,898 despite his gambling losses exceeding his winnings. The casinos reported his large winnings on Form W-2G, totaling $110,553. Jacob Bright, a casual gambler, found himself in a complicated tax situation due to extensive gambling activities.

You will also receive a copy of this form. Reporting: Casinos and other gambling institutions report your winnings to the IRS on Form W-2G if they meet certain thresholds. Losses: You deduct gambling losses “below-the-line” as itemized deductions on Schedule A, but only to the extent of your winnings.

Winnings: You report your gambling winnings from casinos, lotteries, raffles, and other gambling activities as “above-the-line” taxable income. Basic Rules to Reporting Gambling Winnings Now that so many types of gambling are legal in Ohio, when do you have to report your gambling winnings to the IRS? If you enjoy gambling, whether occasionally or frequently, it is crucial to understand how your winnings and losses can affect your tax liability.

Gambling winnings reporting irs