Retirement & Financial Planning Report

If you have any luck at a casino, race track, etc, you must report those winnings as taxable income on your tax return.

Gambling income includes winnings from lotteries and raffles as well; prizes and cash both count. Moreover, payers of those winning must report them to you and to the IRS, if you receive certain amounts, such as $1,200 or more from slot machines.

Gambling losses can offset your taxable winnings, as long as you itemize deductions. Even if you itemize, though, you can’t deduct more losses than the amount of gambling income you report. You can claim any gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction.

Deductible losses don’t have to be from the same type of gambling activities as winnings. For example, poker losses can be deducted against slot machine winnings.

To protect yourself in case your losses are challenged, keep an accurate diary or similar record whenever you gamble or buy a lottery ticket. Keep receipts, tickets, statements or other records to show that you actually lost money. Keep in mind that only the costs of your actual wagering are considered gambling losses. If you travel to a casino or a race track, for instance, you can’t deduct the money you spend for transportation, meals, lodging, and so on.