I think I look good sitting around the poker table in Vegas. There I am, all spiffed out in a diamond collar, groomed nails, and a satin vest. (Ix-nay on the cigar, whiskey, and entourage of fluffy line dancers all named FiFi. The boss doesn’t like it when I bring too much atmosphere to the office.)
Anyway, all’s fun and games right up until I consider my neat pile of winnings and what Uncle Sam will do when he finds out I cleaned out the house: tax me. Tax me big. So after just a couple of profitable trips to the casino, I decided to bone up on Uncle Sam’s rules when it comes to declaring profits and losses on gambling ventures:
Uncle Sam considers income from gambling to include earnings from lotteries, raffles, bets (like those on horse races), and casinos. Also in that group: prizes such as cash, vehicles, and trips to exotic places. (I’m not barking about that fine trip to the spa I won recently.)
Payers must provide you with IRS Form W-2G if the amount of your earned proceeds (your winnings minus your outlay) exceeds a certain dollar figure. That dollar figure is determined by the type of gambling you enjoyed. For instance, you’ll receive a W-2G if you earned more than $1,200 from bingo or slots; more than $1,500 from keno; more than $5,000 from poker; or more than $600 from other types of gambling when the payout is more than 300 times the amount of your initial investment.
If you’re a lucky dog, and you win nice big pots, you get rewarded by having to report your earnings to Uncle Sam on your income tax return each year. But the reporting can be tricky. In general, claim losses up to the amount of winnings, but report losses and winnings separately. Don’t just deduct your losses from your winnings and report the difference.
Like all things IRS, you need to keep sound records, too. During an audit, have within paw’s reach your receipts, tickets, statements, and other similar documentation of your winnings and losses.
Uncle Sam – always there, even at the craps table. It’s enough to make me howl.