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If you enjoy the occasional visit to the casino or plan on going any time in the future, this article will help you in knowing how to manage your taxes after a visit. If you have been fortunate enough to win some money or if you are like most of us and have lost some money, we will lay out what steps you need to take to properly document that.
- Forms you should know:
- Form W-2G, typically given to you by the casino if you win a lot of money but you are responsible for getting one even if you are not provided with one. You can get one of these forms online by going to: https://www.irs.gov/pub/irs-pdf/iw2g.pdf
- Schedule A, a form for your tax deductions which in this case is your losses. You can get this form online by going to: https://www.irs.gov/pub/irs-pdf/f1040sa.pdf
- Tax Returns: You have to report any and all of your gambling winnings as income under “Other Income.”
- Loss Deductions: Depending on the gambling income reported on your W-2G will determine how much you can deduct, this is limited to amounts more than 2% of your adjusted gross income and cannot deduct more than the winnings claimed as income.
- Gambling on sweepstakes, wagering pools, certain pari-mutuel pools, jai alai, and lotteries with winnings of $5,000 or more has a backup withholding rate at 24% for the W-2G under “Specific Instructions” in the “Withholding, Regular Gambling Withholding for Certain Games, Noncash payments, and Backup Withholding” section.
- Gambling on horse racing, dog racing, jai alai, and other wagering has a withholding rate at 24% for the W-2G under “Specific Instructions” in the “Withholding, Regular Gambling Withholding for Certain Games and Backup Withholding” section.
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