Deducting Gambling Losses |

Claiming gambling expenses. 7 Tax Deductions That Set Off Alarms - ABC News

Claiming the Gambling Deduction The way that you claim the gambling deduction is relatively simple.

Penalty for not claiming gambling winnings

If you can get a printout from the casino of your gambling activity, such as if you use a player's club card, it may be helpful. Clothing Ted Schwartz, president and chief investment officer of Capstone Investment Financial Group and ABC News personal finance columnist, said he once had a client who was a professional wrestler who tried to deduct formal clothing he wore for interviews or other public appearances.

You have to have records and proof of where you get your income, so even for "other incomes" I'm sure you have to say where it came from.

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Second, you can only deduct gambling losses to the extent that you have gambling winnings. Legal Expenses Certain personal legal expenses could be deductible to a degree, said Erb. However, before you can claim the deduction, you'll have to meet two important requirements.

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It includes cash winnings and the fair market value of prizes, such as cars and trips. I think, in general, at this point, gamblers who are not evading taxes are not being targeted. This means that you can't best slots soaring eagle the standard deduction, but you can write off expenses like your state income tax, mortgage interest, property taxes, car registration tax and charitable donations.

Your tax loss from the business of gambling can exceed your gambling income but not your gambling loss. In the Florida taxpayer's case with the bathroom, the judge ruled that because the man's children's and personal guests used the bathroom, it wasn't used exclusively for his accounting business. Sophie, the Boston Terrier that Erb's blackjack tournament manager brings to work would not count either.

Erb told one of her clients, an artist, that storing a large work of installment art in a living room does not a home office make.

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Gambling Losses To claim your gambling losses, you have to itemize your deductions. It's okay for someone to travel to a place where gambling is legal, say, Vegas or a riverboat.

The IRS permits you to use per-session recording, which means that instead of recording whether you won or lost each time you pull the slot machine, you can simply record your total for the session. But unless your home office is your primary place of business, auditors will take note if you deduct for related costs. This gambler who lives in a state where playing at gambling games is illegal also lives in a state that incures state income taxes not all states have a state income tax.

Erb said they can't be "junkyard dogs" to be deductible. His reasoning was that he would never wear suits unless for work.

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The Internal Revenue Service generally requires that you report your gambling winnings and losses separately when you file your taxes rather than combining the two amounts. Since gambling is a business, he would file a Schedule C to report claiming gambling expenses income and expenses and would also have to pay self-employment taxes on his profits.

Those are only deductible if they are prescribed. She wanted to deduct for the costs, which were significant on claiming gambling expenses budget, because said she said she would not wear that clothing of her own volition.

The deduction goes on line 28 of Schedule A and you have to note that the deduction is for gambling losses. Casinos send a form W-2G when you win to let the IRS know that they paid you, but it's up to you to establish your losses. Your records should include the date and type of gambling, where you gambled and if you gambled with anyone else, such as a home poker game.

All Your Winnings Must Be Listed On Your Tax Return

Gambling Loss Limitation You can't deduct more in gambling losses than you have in gambling winnings for the year. Then, if you got audited let's say your gambling records showed that you gambled, for example, claiming gambling expenses an online casino from within your state, which is illegal.

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If you had a successful night at the slots or poker tables, you're going to have to share some of the lucky proceeds with Uncle Sam. Diet and Fitness Costs While health and diet expenses that are prescribed by a physician can be deductible, advice from a doctor will not support an expense you try to write off.

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As far as federal income tax, the so-called Silver Platter doctrine prevents the IRS handing the gambler over to authorities. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return.

A professional gambler makes a business out of gambling. Similarly, private jets that are purchased for security reasons could be deductible for corporations, and not just if they offer convenience or comfort, Erb said.

Gambling Winnings and Losses

Many people treat their kitchen table or living room as your home office or home office storage area, but it's often not a primary place of work. First, you may deduct gambling losses only if you itemize deductions, which Erb said is only a third of tax filers.

Tax Court judge ruled in favor of the IRS who said a Florida taxpayer was not entitled to a deduction for the use of his bathroom as a home office expense. If you lose money gambling, you might be able to deduct it on your tax returns. Let's assume a gambler in one of these states is trying to do his taxes honestly.

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For information on withholding on gambling winnings, refer to PublicationTax Withholding and Estimated Tax. As I understand it, the IRS "doesn't care" if you gamble, so long as you keep detailed records of your sessions and claim your winnings and losses.

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Gambling Casual gamblers may not realize they can deduct their gambling losses as professional gamblers do. But, here is my question: Recordkeeping To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.

Tax Guide for Aliens, and PublicationU. Writing off legal services related to a custody battle would probably not be.