Win Big on the Superbowl? Surprise - Those gambling winnings are income.

The Giants won big yesterday, and you might have also if you participated in an office pool, or bet on the over/under, the coin toss, the number of Clydesdale's in Budweiser ads, or any other of the myriad of ways to wager your dollars on Superbowl Sunday.  What you may not know is that those wager winning are taxable income.  

The IRS has issued Tax Tip 2010-34 "Gambling Winnings Are Always Taxable Income" - I guess the name of that Tax Tip says it all.  They go on to give you the top 7  facts the IRS wants you to know about gambling winnings.

  1. Gambling income includes – but is not limited to – winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other non-cash prizes.
  2. Depending on the type and amount of your winnings, the payer might provide you with a Form W-2G and may have withheld federal income taxes from the payment.
  3. The full amount of your gambling winnings for the year must be reported on line 21 of IRS Form 1040. You may not use Form 1040A or 1040EZ. This rule applies regardless of the amount and regardless of whether you receive a Form W-2G or any other reporting form.
  4. If you itemize deductions, you can deduct your gambling losses for the year on line 28 of Schedule A, Form 1040.
  5. You cannot deduct gambling losses that are more than your winnings.
  6. It is important to keep an accurate diary or similar record of your gambling winnings and losses.
  7. 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.

Want to know more?  Look to IRS Publication 529 "Miscellaneous Deductions" or Publication 525 "Taxable and Nontaxable Income".

Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.njelderlawestateplanning.com/admin/trackback/270464
Comments (0) Read through and enter the discussion with the form at the end
Post A Comment / Question Use this form to add a comment to this entry.







Remember personal info?