Taxes on Gambling Winnings and Deducting Gambling Losses
For you and your family. The IRS takes the position that sweepstakes type winning where you don't really have to do anything but enter -- i. Individuals abroad and more. Learn about the many benefits of filing your taxes with efile. Employer's Quarterly Federal Tax Return.
Help Menu Mobile
You must generally report your winnings and losses separately, rather than reporting a net amount. The IRS requires you to keep detailed records of your gambling winnings and losses, and to keep any related documents, including receipts, tickets, payment slips, statements, Form W-2G, and Form You must be able to prove both your winnings and losses if you wish to deduct your losses.
The IRS suggests that you keep a gambling log or diary. If you efile your tax return, you do not have to send any W-2Gs or other documents to the IRS but you must keep them for your records in case of audit. The rules described on this page are for the majority of people with gambling income, those who are not professional gamblers.
If gambling is your actual profession, then your gambling income is generally considered regular earned income and is taxed at your normal effective income tax rate. As a self-employed individual, you will need to report your income and expenses on Schedule C. You can deduct gambling losses as job expenses using Schedule C, not Schedule A. Nonresidents can usually report income that is "effectively connected" with a U.
Gambling winnings, however, are considered to be "not effectively connected" and so must generally be reported on Form NR. Nonresident aliens generally cannot deduct gambling losses. However, there is a tax treaty between the United States and Canada that generally allows Canadian citizens to deduct their gambling losses, up to the amount of their gambling winnings. If you have gambling winnings or losses, they must be reported on your tax return.
When you prepare your return on efile. We will prepare all the forms needed to report this on your return so you don't have to worry about which form you need. Biggest Refund Guarantee Details. Get Tax Return Support. Give Us Your Feedback! Is Gambling Income Taxable? What Are Considered Gambling Winnings?
Gambling winnings include, but are not limited to, money or prizes earned from: Any sweepstakes, wagering pool including payments made to winnners of poker tournaments , or lottery.
Any other wager if the proceeds are at least times the amount of the bet. EINs and other information. Get Your Tax Record. Bank Account Direct Pay. Debit or Credit Card. Payment Plan Installment Agreement. Standard mileage and other information. Instructions for Form Request for Transcript of Tax Return. Employee's Withholding Allowance Certificate. Employer's Quarterly Federal Tax Return. Employers engaged in a trade or business who pay compensation.
Popular For Tax Pros. Apply for Power of Attorney. Apply for an ITIN.