The gambling institution is not required to issue a Form W2-G if you win less than $600. However, the IRS requires you to report all winnings, whether the place that you gambled reports them to the IRS or not. All gambling winnings are taxable whether you win enough at one time to generate a tax form W2G or not.
Also, you can’t subtract the cost of gambling from your winnings. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and keep 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."
The session method does allow the netting of wins and losses within a continuous gambling session. This can result in lower gross winnings and lower taxes owed. Both professional and recreational gamblers can use this method.
A session of play begins when you place the inital wager on a type of game and ends when you complete your last wager on the same type of game, before the end of the same calendar day.
Your winnings and losses typically need to be separated and reported individually. You cannot offset your winnings from one day with your losses from another day in order to report your net winnings or losses. The IRS does allow you to net your wins and losses on the same day for the same type of wagering if you meet certain requirements.
The IRS does requires you to keep a log book or other record of your winnings and losses in order to deduct your losses from your winnings. A gambling session requires that a gambler must organize and report his/her her gambling transactions by time, place and activity. You must keep track of how much money you start the session with and any money that you added during the session (such as any new money taken form an ATM).Keep money for food and entertainment separate from your gambling money.
The IRS lists the following items as required for recordkeeping for a casual gambler:
· Date of the wagering
· Name and address of the gambling establishment
· Names of others present
· Amounts won or lost
State rules vary on how you report your gambling winnings.
You would report your gambling winnings under "Wages & Income", "Less Common Income" Prizes, Awards and Gambling Winnings"
Click here for How to Pay Taxes on Gambling Winnings and Losses
Click here for Topic no. 419, Gambling income and losses
{Edited 04/02/2025| 08:40 AM PST}
@larbou22
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