Gambling Winnings And Losses

Your summer vacation may mean a trip to the casino or the racetrack. What will you owe Uncle Sam if Lady Luck happens to be on your side?

Gambling winnings are fully taxable and must be reported on your tax return.

You must file Form 1040 and include all of your winnings. Gambling income includes, among other things, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. You can find more information in Publication 525, Taxable and Nontaxable Income.

Anyone who pays your winnings or awards you a prize is required to issue you a Form W-2G if your winnings are subject to Federal income tax withholding or if your winnings are over a certain amount.

To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show both your winnings and losses.

For more information, refer to Publication 529, Miscellaneous Deductions.

The publications are available at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Links:
Publication 525, Taxable and Nontaxable Income
Publication 505, Tax Withholding and Estimated Tax
Publication 529, Miscellaneous Deductions

Internal Revenue Service