Taxes question on gambling winnings

[AnyGivenSaturday]

Where on my tax form do I declare winnings, as wages under W2 earnings? I have more than enough losses to offset these winnings but how can I prove that? I have Xpressbet. I am obviously not a professional gambler so can I still declare the losses as an offset for the winnings? Any info is appreciated

[Whos the Cowboy]

Where on my tax form do I declare winnings, as wages under W2 earnings? I have more than enough losses to offset these winnings but how can I prove that? I have Xpressbet. I am obviously not a professional gambler so can I still declare the losses as an offset for the winnings? Any info is appreciated

Gambling winnings are entered as other income

Losses are claimed on schedule A, and your total schedule A deductions must exceed the standard deduction to allow for your gambling losses to help.

If you don't have enough itemized deductions to go over the standard deduction, you're SOL when it comes to deducting gambling losses, no matter how much 1099 G gambling earnings you have. You cannot subtract gambling losses from gambling winnings directly.

ADM accounts track wins and losses for you, and most provide year end statements of wins and losses

[AnyGivenSaturday]

So say I have no other itemized deductions and say I got 8K in winnings but 12K in losses, they won't offset directly and I still have to pay taxes on the 8K?

[Whos the Cowboy]

So say I have no other itemized deductions and say I got 8K in winnings but 12K in losses, they won't offset directly and I still have to pay taxes on the 8K?

Correct. Gambling losses are subject to schedule A floors, but 8K in gambling winnings should put your 8K in deductions over the standard deduction, and other deductions(taxes and other allowable deductions) can be claimed. If you have 8K in winnings, you can only take a deduction of 8K on schedule A.

The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2009, they are:

• $5,700 for Single
• $11,400 for Married Filing Jointly
• $8,350 for Head of Household
• $5,700 for Married Filing Separately
• $11,400 for Qualifying Widow(er)

Fortunately, I have mortgage interest and property taxes that put my deductions over the standard deduction so that other deductions are usable.

[AnyGivenSaturday]

Thanks for the info. Basically then I can't itemize and have to declare 8K on my 1040A as 8K in earnings on the W2 earnings line and my losses mean nothing then, even if they exceed. I wonder what would happen if I don't ever report my winnings although the IRS gets a copy of my winnings. Declaring these winnings is costing me $1000 in a tax refund. Doesn't seem right that I've lost back everything I won!! And then I have to pay taxes on it!

[Whos the Cowboy]

Thanks for the info. Basically then I can't itemize and have to declare 8K on my 1040A as 8K in earnings on the W2 earnings line and my losses mean nothing then, even if they exceed. I wonder what would happen if I don't ever report my winnings although the IRS gets a copy of my winnings. Declaring these winnings is costing me $1000 in a tax refund. Doesn't seem right that I've lost back everything I won!! And then I have to pay taxes on it!

If you have documented losses equal to your winnings, you can also deduct state income taxes, property taxes, etc.

You cannot file a 1040A-you file form 1040 and list the 1099 or W2G income on the other income line.

I've forgotten about reportable gambling winnings before, and usually about 18 months later I get a letter from the IRS in the mail.

[EquineAnne]

Thanks for the info. Basically then I can't itemize and have to declare 8K on my 1040A as 8K in earnings on the W2 earnings line and my losses mean nothing then, even if they exceed. I wonder what would happen if I don't ever report my winnings although the IRS gets a copy of my winnings. Declaring these winnings is costing me $1000 in a tax refund. Doesn't seem right that I've lost back everything I won!! And then I have to pay taxes on it!

If you don't report and they catch up with you, you will ultimately have to pay the tax, a fine, and penalties -- over the years, that can be significant. Plus, be careful with large $$ earnings. They can impose fines and penalties for not paying estimated tax on earnings made throughout the year. We have a pay-as-you-go tax system therefore taxes must be paid when they are earned.