Feeling Lucky? Well, the IRS Wants Some of Your Luck!

Stephen Ganns, http://www.gannsblog.wordpress.com/, discusses how to report gambling winnings and losses when preparing your taxes. Gambling winnings, as many people are aware, are fully taxable. In most instances, any significant gambling winnings will be reported to you on a W2-G and must be reported on your tax return. You can deduct gambling losses against your gambling winnings, but only up to and including the amount you have won, so in a year where you might have won $1,000, all that you will be able to deduct in losses is $1,000.

Gambling winnings can only be offset by losses in the same calendar year. Losses from other years cannot be used. So, if you are thinking about gambling on the upcoming Super Bowl (legally, of course) and if you win, be sure to keep any losing tickets from any other gambling done through December of that year, to offset your winnings.

The one quirk in this law is that the deductions don’t apply to people who cannot itemize.  In order to be able to offset gambling winnings with gambling losses, you must itemize deductions. This is a big disadvantage to those who cannot, for whatever reason, itemize.

Good luck on your gambling this year and don’t forget to accumulate whatever losing tickets you may have. We don’t want the IRS to be sharing in your good fortune, if possible.

Stephen J. Ganns

Stephen J. Ganns, CPA
914-682-7007
steve@gannscpa.com
www.gannscpa.com

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