Note: this information is current as of the 2017 tax year and is subject to change for a gambling winner in tax year 2018. For assistance with filing your 2018 gambling winnings and losses, meet with Tom.
Picture the scene; you’re sitting at your favorite slot machine, cursing under your breath at the consistent losses your machine is doling out to you at an unsettling rate. Then it happens. You hit the repeat bet button, the machine spins to life. To your astonishment, a sight you’ve never seen before. The machine lights begin flashing wildly, the music is of a pompous cheer, and you’ve won a jackpot. Congrats, winner.
Eventually reality settles in with the arrival of Form W2-G. Sorry friend, you likely will not win that much money, as you still have to pay taxes on it.
In addition to bragging to friends about your lucky night, gambling winnings must be reported with your tax filing. You must report it on line 21 of Form 1040, otherwise known as the Other Income line of your personal tax return. This value includes all cash prizes, as well as all non-cash prizes such as free trips and free cars. Winnings can come from places such as but not limited to raffles, horse races, casinos and state lotteries.
The Internal Revenue Service has an online tool which can assist in determining how to report gambling winnings and losses.
But wait, you actually lost more money than you won for gambling. The good news is you can deduct your gambling losses up to the amount of your gambling winnings on Schedule A for itemized deductions. The catch, however, is that the IRS requires accurate documentation for all gambling winnings and losses to be able to deduct gambling losses. This includes receipts, tickets, statements and other records which show the amount of winnings and losses. You’ll want to record where the prize was won/lost, what date and time it was won/lost, and how the money was won/lost.
Players card pleasantness
In addition to tracking points and complimentary goods, players cards are used to track winnings and losses at a casino throughout the year. Locally, casinos such as Mystic Lake, Grand Casino and Treasure Island offer end of year statements for player’s cards. Each casino requires a request form to be filed to receive your information.
These reports only track players card information, and these reports may not be 100 percent correct. Please contact each casino for more information.
Non-resident aliens of the United States must report gambling winnings with form Form 1040NR. These taxpayers may not take gambling losses as a deduction.