Can I Offset My Gambling Winnings/Losses On My Government Taxes?
A question that is often asked, yet which there seems to be a lot of ambiguity about is, “Can I offset my gambling winnings/losses on my government taxes?” If you enjoy visiting the casino, or even if you regularly take part in state lotteries or go to horse races and place bets you may be eligible to pay tax on your earnings.
Basic Gambling Laws Regarding Taxation
Any winnings you make when gambling, no matter how much or what form of gambling must be declared as income. By the same token, all losses accrued while gambling are likewise deductible up to the amount of your earnings. You must report your earnings and your losses separately. You cannot just report one figure alone, for example deduct your losses from your winnings and reporting the balance as income. Both figures, winnings and losses, must be reported separately.
How Can I Offset My Gambling Winnings/Losses On My government Taxes?
Here are some simple steps you can take to answer your question, “Can I offset my gambling winnings/losses on my government taxes?” Keep accurate accounting of your gains and losses. This does not have to be in the form of receipts, but you should keep a detailed journal that includes the date and type of gambling, the name and address of the casino or other establishment, names of anyone accompanying you and the amount won or lost. Along with this you also need proof that you were indeed at that establishment, so you should save any receipts including but not limited to wager receipts, credit card cash advances or other bank transactions. Basically, you will need to keep on hand proof that you were at the establishment at the time and day you log in your journal.
Providing you do this, and you accurately report your wins as well as your losses, you should be able to offset your gambling winnings and losses on your government taxes.