HobNobMurfreesboro Interviews Jason Jones Bringing You Seven Things the IRS Wants You to Know About Reporting Your Gambling Winnings

Murfreesboro, TN, August 12, 2009 --(PR.com)-- HobNobMurfreesboro has been working closely with Jason Jones, CPA who has over 13 years of financial experience and together have laid out some important things the IRS wants you to know about reporting your income from gambling.

All gambling winnings are fully taxable.
Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, poker tournaments and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips.

A payer is required to issue you a Form W-2G if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding.

Even if a W-2G is not issued, all gambling winnings must be reported as taxable income. Therefore, you may be required to pay an estimated tax on the gambling winnings. For more information on paying estimated taxes, refer to IRS Publication 505, Tax Withholding and Estimated Tax.

You must report your gambling winnings on Form 1040, line 21.
If you itemize your deductions on Form 1040, Schedule A, you can deduct gambling losses you had during the year, but only up to the amount of your winnings. Your losses are not subject to the 2 percent of AGI Limitation. Big tax planning problem here is that if you don't have enough deductions to itemize, then you can't claim any losses.

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.

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