Tax Tips: Do I have to report my gambling income?

This question comes up a lot as people find themselves regularly participating in the social ill of gambling. Most people lose far more than they win. That's why gambling is so stupid. But what if you "get lucky" and win a chunk of money. Do you have to report it? What if you've lost far more than you've won? Then do you have to report it?

The rules surrounding gambling are simple. Any money you win (from lotteries, raffles, horse racing, casinos, etc.) is taxable. The same goes for any prizes you win, such as cars, electronics, trips, or real estate. You may get a form W-2G to document your winnings, but even if you don't get one, you're responsible for reporting the gambling income.

Your gambling income goes on line 21 of Form 1040. Any gambling losses that you have documented can go on Schedule A of Form 1040. However, you can't deduct more than your gambling winnings. You have to keep accurate records of your winnings and losses. Most people don't seem to do that, but it's what the law requires. Be careful: This is a much-abused part of the tax code because most gamblers don't have records that support their deductions. Don't set yourself up to be audited.

More information can be found on gambling winnings and losses on the IRS website.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Taxpayer Beware: Email Phishing Scams

The IRS reported a 400% rise in phishing scams during the 2016 tax season. Phishing schemes are designed by cyber criminals who attempt to lure unsuspecting victims into revealing their personal and financial information, usually through unsolicited emails. You can avoid becoming a victim of fraud if you know what to look for.

Read More

Brought to you by TurboTax.com

Can I Deduct My Computer for School on Taxes?

You may be able to get back the cost of that computer you're using for school on your income taxes.

Read More

Brought to you by TurboTax.com

What Are Income Tax Rates?

Confused by what percentage of your income goes to taxes and why it does not match the rate in the tax table? Here are the basics on how income tax rates work.

Read More

Brought to you by TurboTax.com

Can Cellphone Expenses Be Tax Deductible with a Business?

Cellphones have become just as vital to business as a land line, which makes cellphone use a legitimate, deductible business expense. But for most of us, cellphones are also inextricably linked to our personal lives, so it’s a deduction that the IRS scrutinizes very carefully to make sure personal electronics use isn’t being claimed as a business expense.

Read More

Brought to you by TurboTax.com
Read Full Story