Rev. date: 01/01/2011
The following rules apply to casual gamblers. 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, but is not limited
to, 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. For
additional information, refer to
Publication 525,
Taxable and Nontaxable Income.
A payer is required to issue you a
Form W-2G
if you receive certain gambling winnings or if you have any gambling winnings
subject to Federal income tax withholding. All gambling winnings must be
reported on your Form 1040, including winnings that are not subject to
withholding. In addition, you may be required to pay an estimated tax on your
gambling winnings. For information on withholding on gambling winnings, refer to
Publication 505,
Tax Withholding and Estimated Tax.
You may deduct gambling losses only if you itemize deductions.
However, the amount of losses you deduct may not be more than the amount of
gambling income reported on your return. Claim your gambling losses on Form
1040, Schedule A, as a miscellaneous itemized deduction that is not subject to
the 2% limit.
It is important to keep an accurate diary or similar record of
your gambling winnings and losses. To deduct your losses, you must be able to
provide receipts, tickets, statements or other records that show the amount of
both your winnings and losses. Refer to
Publication 529,
Miscellaneous Deductions, for more information.
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