Today TaxMama hears from Rose who says, “I have been gambling pretty heavily this year. I have forms showing that I have won in excess of $30,000. I have had state taxes withheld from each win. Unfortunately I wasn’t quite as good with the Federal. I did have some withheld. Going through my records (bank statements/cancelled checks) I have spent more than $15,000 to win this amount. Can I claim this amount as a loss? I have ATM withdrawals (showing casinos, along with checks made payable to casinos as proof).”
Hey Rose, Congratulations. You’ve done well.
You will report your gambling income on the "other income" line of page 1 of your 1040 return.
Your gambling losses will go onto Schedule A, Misc Deductions
There’s a special place just for things like gambling losses, though. It’s line 27 – Other Miscellaneous Deductions. This allows them to be reported as expenses NOT subject to the deduction of 2% of adjusted gross income (AGI).
So this will help reduce the tax bite.
If you weren’t already itemizing your deductions, this is a good opportunity to look for additional things to write off Schedule A.
Look at your W-2s – and the gambling winnings forms for your state income taxes withheld. Or see if you made any major purchases and you can use the sales tax deduction instead. Look up your auto registrations. And be sure to add up your charitable contributions.
If you have time before the year ends, clean out your closets, attic and garage and donate things you’re no longer using to your favorite charity. Make a list of everything before you do. You can use the ItsDeductible software to help you assign values to those things.
Doing all this will help you take the greatest advantage of the gambling losses you’re able to deduct – and perhaps end up getting refunds by the time you’re done.
And, remember, you’ll find answers about gambling and other tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Schedule A :: See line 27 â€“ Other Miscellaneous Deductions
- ItsDeductible :: To get values for your donated household items