When you pocket $600 or more (and that amount is 300 times your bet) at a horse track, win $1,200 at a slot machine or bingo game, or take $1,500-plus in keno winnings, the payer must get your Social Security number and let the IRS know you came into the extra income.
And while poker aficionados argue the card game isn’t gambling, but a game of skill, the IRS still wants details on how well you played Texas Hold ‘Em. The IRS now requires all poker tournament sponsors to report competitors’ winnings of more than $5,000.
However, you don’t have to pay taxes on all your earnings, regardless of how you got them. You can reduce the amount of money the IRS will tax by reporting your losses as part of your overall itemized deductions .
Keep Track of Your Gaming Losses
When you do claim your gambling losses on your tax return, it’s a good idea to keep a record of them. While you don’t have to send your loss data in with your return, documentation could come in handy if the IRS ever questions the claim.
Acceptable gambling-loss recordkeeping includes a written log detailing the date of your wagers, the location, amount of the bet, type of gaming, and wins and losses. You should also hang on to losing lottery tickets or bingo cards.
The good thing about deducting gambling losses is that, unlike some other deductions, you don’t have to meet a certain level before you can claim them. But then again, they aren’t completely unlimited.
Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
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About Berrios & Associates, Inc.
Since 1999, Berrios & Associates, Inc. has been providing a distinctive mixture of leadership-knowledge, and customer service satisfying client needs in advisory, tax, and outsourcing. Serving a diverse client base from individuals and sole proprietors to private corporations with nationwide and international locations. In the domain of accounting firms, Berrios & Associates has engraved a distinctive business based on diverse solutions through the interpersonal relationship of corporate and personal tax, corporate back office support, and business growth advisory. The firm directs clients through their everyday operations to ensure they have the right business model in place to meet their business goals.