http://www.nwitimes.com/tax-time-ad...cle_875fb852-4e54-5aa7-a65b-e4df12a1029d.htmlTax time advice for gamblers from expert
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If you’re a recreational casino gambler, this can mean referring back to some meticulous record keeping, especially if luck was on your side and you won a jackpot playing the slot machines.
If you collected a slot jackpot of $1,200 or more in 2015 the casino was obligated to notify the Internal Revenue Service of your good fortune in the form of a W-2G (certain gambling winnings). This means you must report the winnings on your federal income tax return.
The expansion of gambling that has taken place across the United States during the last 15 years has meant more people than ever are required to do this.
That’s the bad news. The good news is you can claim losses up to the amount of the winnings if you are eligible to itemize deductions. But you had better have the proper documentation to support those losses in the event the IRS calls looking for proof.
According to tax expert Richard LaGrant, a partner with Denis Gioletti at Consolidated Tax Services, Inc. in Hoffman Estates, Illinois, the IRS has stepped up efforts in recent years to hold gamblers accountable.
“I have seen more audits on gambling,” says LaGrant, an enrolled agent who has earned the privilege of practicing (representing taxpayers) before the IRS. “Requirements for supporting losses against gambling winnings have always been around, but they used to be loosely enforced. The IRS is not looking the other way anymore. They are really holding people to the letter of the law.”
LaGrant recommends keeping a daily log to track your gambling activity. The information should include the name of the casino, the date, the particular game you played, the machine’s serial number, and the length of time you played.
Other forms of documentation to keep include canceled checks, receipts from ATM withdrawals, records of cash markers from casino credit departments, parking and dining receipts; anything which proves that you withdrew cash from the casino or were present on that date.
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The win/loss statements that you can request at the end of the year from casinos you have patronized may not be good enough documentation if you wish to claim losses to offset federal tax liability on gambling winnings.
To play it safe, you can request that the taxes be taken out on the spot when you win a jackpot.
If you can substantiate losses at the end of the year, you will take a credit for the amount they withheld and you’ll get back some if not all of the money.
“The IRS can detect hasty records made up two years after the fact,” he said. “They’re looking for a timely kept diary of when this gambling takes place. They’re serious about it. They want to see the proof.”
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- John G. Brokopp/jgbrokopp1@gmail.com
- <time class="asset-date text-muted" datetime="2016-03-17T06:00:00-05:00">10 hrs ago</time>
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If you’re a recreational casino gambler, this can mean referring back to some meticulous record keeping, especially if luck was on your side and you won a jackpot playing the slot machines.
If you collected a slot jackpot of $1,200 or more in 2015 the casino was obligated to notify the Internal Revenue Service of your good fortune in the form of a W-2G (certain gambling winnings). This means you must report the winnings on your federal income tax return.
The expansion of gambling that has taken place across the United States during the last 15 years has meant more people than ever are required to do this.
That’s the bad news. The good news is you can claim losses up to the amount of the winnings if you are eligible to itemize deductions. But you had better have the proper documentation to support those losses in the event the IRS calls looking for proof.
According to tax expert Richard LaGrant, a partner with Denis Gioletti at Consolidated Tax Services, Inc. in Hoffman Estates, Illinois, the IRS has stepped up efforts in recent years to hold gamblers accountable.
“I have seen more audits on gambling,” says LaGrant, an enrolled agent who has earned the privilege of practicing (representing taxpayers) before the IRS. “Requirements for supporting losses against gambling winnings have always been around, but they used to be loosely enforced. The IRS is not looking the other way anymore. They are really holding people to the letter of the law.”
LaGrant recommends keeping a daily log to track your gambling activity. The information should include the name of the casino, the date, the particular game you played, the machine’s serial number, and the length of time you played.
Other forms of documentation to keep include canceled checks, receipts from ATM withdrawals, records of cash markers from casino credit departments, parking and dining receipts; anything which proves that you withdrew cash from the casino or were present on that date.
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The win/loss statements that you can request at the end of the year from casinos you have patronized may not be good enough documentation if you wish to claim losses to offset federal tax liability on gambling winnings.
To play it safe, you can request that the taxes be taken out on the spot when you win a jackpot.
If you can substantiate losses at the end of the year, you will take a credit for the amount they withheld and you’ll get back some if not all of the money.
“The IRS can detect hasty records made up two years after the fact,” he said. “They’re looking for a timely kept diary of when this gambling takes place. They’re serious about it. They want to see the proof.”
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