Tax question

SBBC · Feb 1, 2007

Hi guys,

I remember we had a discussion on this before however I can not find the thread.

2006 overall I won 10411.26 and lost 8379.4 = +2031.86.

How would I go about claiming that on my taxes? Also the sportsbook did not send me a form to fill out - do they usually or not? I have never received one before.

Also what is the best way to avoid an audit from the IRS - if they see I have won over 10k would that raise a red flag to them?

Thanks again for the help.
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</td> </tr></tbody><tr style="height: 12.75pt;" height="17"></tr></table> <table x:str="" style="border-collapse: collapse; width: 48pt;" border="0" cellpadding="0" cellspacing="0" width="64"><col style="width: 48pt;" width="64"><col> <tbody><tr><td class="xl24" style="height: 12.75pt; width: 48pt;" x:num="" align="right" height="17" width="64">10411.26
</td> </tr></tbody><tr style="height: 12.75pt;" height="17"></tr></table> <table x:str="" style="border-collapse: collapse; width: 48pt;" border="0" cellpadding="0" cellspacing="0" width="64"><col style="width: 48pt;" width="64"><col> <tbody><tr><td class="xl24" style="height: 12.75pt; width: 48pt;" x:num="" align="right" height="17" width="64">10411.26
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bilbal · Feb 1, 2007

you put the winnings on line 21 of 1040 (Other Income) and you deduct the losses on line 27 of Schedule A. An audit isn't likely unless the IRS feels they will have a good chance of recovering more money from you than it will cost them to audit you.

snoop · Feb 1, 2007

Your net winning is $2,032 so your gambling loss deduction is same amount-$2,032. Unless you have other stuffs on Sch. A such as mort-interests, state withholding ...etc, it does not make a whole lot different. If you use standard deduction, then forget the loss.

bilbal · Feb 1, 2007

Topic 419 - Gambling Income and Expenses
Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.
A payer is required to issue you a Form W-2G (PDF) if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported irrespective as to whether any portion thereof is subject to withholding. in addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.
You may deduct gambling losses only if you itemize deductions. Claim your gambling losses as a miscellaneous deduction on Form 1040, Schedule A (PDF). However, ***the amount of losses you deduct may not be more than the amount of gambling income you have reported on your return***. It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.

SBBC · Feb 1, 2007

Thanks guys!

Marco · Feb 2, 2007

"The amount of losses you deduct may not be more than the amount of gambling income you have reported on your return."

This year you made $2032.00.

You pay taxes on $2032.00

Next year if you lose $2032.00 the govt fucks you over by not letting you take a deduction on your loss.

Clearly an unfair and biased policy where only you lose, and the govt only wins. You're paying taxes in winning years without the benefit of being able to use the same system justifiably in representing your loss in years that you lose.

Unless you expect to win every year, which is a lofty goal, do yourself a favor and out of fairness for the injustice of the govt policy, just claim winnings of 10,411.26 and balance it out with a loss for the same.

No reason to try to be above the board when they're implimenting policies that are not.

SBBC · Feb 2, 2007

OK I am getting to understand this now..

Snoop I don't understand your statement though: "Your net winning is $2,032 so your gambling loss deduction is same amount-$2,032"

If I did that on my taxes I would be saying I won $0 and therefore not claiming the tax on the 2,032 - or am I reading that wrong?

To confirm:

I put 10411.26 on Line 21 (of 1040) and put 8379.4 on line 27 (of schedule A)

Thanks again - tax shit is annoying ;p

Fishhead · Feb 2, 2007

SBBC said:
OK I am getting to understand this now..

Snoop I don't understand your statement though: "Your net winning is $2,032 so your gambling loss deduction is same amount-$2,032"

If I did that on my taxes I would be saying I won $0 and therefore not claiming the tax on the 2,032 - or am I reading that wrong?

To confirm:

I put 10411.26 on Line 21 (of 1040) and put 8379.4 on line 27 (of schedule A)

Thanks again - tax shit is annoying ;p

Make sure you have proof of those above figures.......preferably in a diary or something similar.

Overall, your figures are very small compared to the vast majority that do this.................but still proff is needed.

You will be fine,
-FH-

Redneckman · Feb 2, 2007

Fish, what do you do when you play a bunch of scalps and middles, which I know you do? Show millions of dollars as winnings on line 21 and millions of losses as itemized deductions?

Fishhead · Feb 2, 2007

Redneckman said:
Fish, what do you do when you play a bunch of scalps and middles, which I know you do? Show millions of dollars as winnings on line 21 and millions of losses as itemized deductions?

A couple years in the 80's-90's did.............

In some years I have also filed as a "PROFESSIONAL GAMBLER"..........

I have other "income" that varies from year to year, so my taxes are more complex than most and very hard to describe in a forum setting or would I want to.

PLEASE CHECK the FINANCIAL FORUM for some very good tax information on gambling.................

SBBC · Feb 2, 2007

Fishhead said:
Make sure you have proof of those above figures.......preferably in a diary or something similar.

Overall, your figures are very small compared to the vast majority that do this.................but still proff is needed.

You will be fine,
-FH-

Fish - I have all the logs from each bet made so any proof they would need I have.

Also I do not need to send them my logs just have them on hand correct?

Thanks again guys.

Fishhead · Feb 2, 2007

SBBC said:
Fish - I have all the logs from each bet made so any proof they would need I have.

Also I do not need to send them my logs just have them on hand correct?

Thanks again guys.

Correct..........all that is required of you is reporting the income on LINE 21 as OTHER INCOME and taking the deduction on Schedule A.

The records/diary would come into play in the very small chance that you may be audited.

-FH-

SBBC · Feb 2, 2007

Fishhead said:
Correct..........all that is required of you is reporting the income on LINE 21 as OTHER INCOME and taking the deduction on Schedule A.

The records/diary would come into play in the very small chance that you may be audited.

-FH-

Great - thank you!

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