Articles

Gambling with Taxes by Rick D. Bazzani. CPA


Posted on April 25, 2017 by Rick Bazzani

Individual taxpayers who gamble for pleasure are subject to federal income taxes on their winnings. This includes not only the monetary spoils earned from playing lotteries or betting at casinos but also the fair market value of non-cash prizes, such as cars and trips. Similarly, individuals who are not so lucky may have an opportunity to deduct gambling losses from taxable income up to the amount of their gambling income.

Reporting gambling income and losses requires taxpayers to keep track of their lucky streaks and maintain appropriate records, including logs of winning and losses and copies of receipts and tickets. When winnings exceed certain amounts, the payer is required to provide the gambler with a copy of Form W-2G, which it also issues to the IRS.

 

For example, it is customary for a payer to issue a Form W-2G to taxpayers with winnings of $600 or more for which the payouts are at least 300 times the amount of their wagers. New for 2017 are higher thresholds for winnings related to slot machines, Bingo and Keno.

 

 

Gambling winnings as reportable as “other income” on IRS Form 1040 of an individual’s personal tax return. Losses, however, are reported on Schedule A, Itemized Deductions.

About the Author: Rick D. Bazzani, CPA, is a senior manager with Berkowitz Pollack Brant’s Tax Services practice, where he provides individuals with a broad range of tax-efficient estate-, trust- and gift-planning services. He can be reached in the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or at info@bpbcpa.com.