Are gambling winnings taxable? Are gambling losses tax deductible?
In a word, yes. But this question requires a bit of a disclaimer before going into any detail: none of us here at ace-ten.com are accountants, attorneys, or tax officials—so what follows is based on our own experience, practices, and observations. None of this constitutes a professional service, consult a certified expert. Seek professional tax advice to be 100% sure that you adhere to local tax laws. This is purely “helpful” blackjack info.
That said, gambling winnings must be reported as income, and losses may be taken as itemised deductions (if itemise rather than taking the standardised deduction). You can’t deduct losses more than winnings, and they don’t carry forward from year to year. Also, casino comps are supposed to be included as part of your winnings.
What amount of gambling winnings are taxable
For winnings at slots or keno more than a certain amount, the casino is required to present you with a form W2G. While this form is not necessary for table games regardless of the amount, some casinos will issue them nonetheless. Casinos are also expected to report any cash transactions more than $10,000—but may, at their discretion, record and report lesser amounts as well. For the most part, however, it’s an honour system, and you’re expected to keep your records.
The best way of keeping track of losses, winnings, and comps is to keep a diary of your gambling that includes places (casino and location), dates, and times along with amounts. This doesn’t need to be sent along with your returns but should be kept with your tax documents in case of an audit. You should save any other documentation related to gambling, such as tickets, checks, receipts, or markers, as you’ll need them to substantiate your claims in the event of an audit.