Gambling Income and Losses: Gambling winnings are fully taxable and you must report the income on your tax return, according to Jeffrey Levine of Buckingham Strategic Wealth. Gambling income includes but isn't limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions."
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00:00you've got questions well we've got answers and we have the man to answer them jeffrey
00:24levin from buckingham jeffrey welcome back to another episode of ask the hammer hey bob good
00:29to be with you good to be with you i understand that your inbox has some questions in it right now
00:34yeah this week we got an interesting question especially for this time of year says hey
00:39i'm into sports betting but i haven't done so well if i haven't made any money is there anything
00:45to report to the irs and you know first off i guess i'm sorry but chances are if you bet enough you're
00:54not going to come out a winner that's the house usually wins and when we're looking at sports
01:00betting you have income to declare to the extent that you have winnings right you can declare
01:06gambling losses only to the extent that you have gambling winnings for most people right unless
01:12that is you are a professional gambler now just because you don't have any other job and you gamble
01:20that does not make you a professional gambler i think that's something we have to get out of the
01:24way right away i've spoken to some retirees over the years like well i don't do anything else i guess
01:28i'm a professional gambler now no unless that's your regular job and you are truly engaged in it to make
01:34a profit uh that is you know that's a that's a tough bar to clear so for most people if you haven't
01:41won anything uh and you just have lost everything then you know no there's nothing to report you're
01:47you're in the clear i guess that's one good part about never winning no one will know that you lost
01:53so much money um a question right so many states are allowing uh online betting now i take it that
02:00the states will at least be able to track how much you've lost and how much you've uh won and at least
02:06maybe that will make it um easier to report should you have any winnings yeah and if you win enough you
02:12will get uh you will be issued a 1099 whether that's from a online or from a casino when you win
02:18a significant amount of money you are issued a 1099 but again there is the ability to write off
02:24gambling winnings against those gambling law rather to write off gambling losses against those gambling
02:30winnings so just because you have a 1099 doesn't mean you have net positive income i mean a great example
02:35of this would be a business owner right a business owner if they receive 1099s from the uh you know
02:42from those who have paid them throughout the year well just because you received money doesn't mean
02:47you made a profit right you claim your expenses against it and it's very similar with gambling except
02:52with gambling you can't really run a loss right if you lose more than you win generally you just lose
02:59but if you win more than you lose you have to report that right but you don't get a tax benefit
03:04when you lose more than you win unless again you're a professional gambler which is a very
03:09high bar to try and and beat yeah well my guess is it's not a gamble should people write to us with
03:17their questions that's right don't gamble with your future ask us the question first and we'll give you
03:22the answer and so if you have a question email bob and i give us a shout you can reach us at ask
03:27the hammer at buckinghamgroup.com that's ask the hammer at buckinghamgroup.com and bob and i look forward
03:33to answering your questions real soon
03:35you