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Are Gambling Winnings Taxable Income?

TaxBizPro, LLC Posted on: February 25, 2010 10:30

You recently bought a lottery ticket and have won, or your trip to Las Vegas was a success and you made some cash in the casinos!  Well, the gambling winnings are fully taxable and must be reported on your tax return. Here are some facts you should know on this.

  • 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 might need to withheld federal income taxes from the payment.
  • The full amount of your gambling winnings must be reported on your individual income tax return form 1040 line 21.  You cannot use other forms to report the winnings, such as Form 1040A or 1040EZ.
  • If you itemize deductions, you can deduct your gambling losses on line 28 of Schedule A, Form 1040, but the deduction is limited to the amount of your winnings. So you cannot deduct more that you won.
  • It’s important to keep accurate records to evidence your gambling expenses. You can provide: receipts, tickets, statements or other records that show the amount of both your winnings and losses.
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Posted in:Personal Tax ArticlesThis article was written by TaxBizPro, LLC 2017, all rights reserved ©.  

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