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Are Gambling Winnings Taxable?

The answer to that question is yes, gambling income is taxable. Gambling income includes winnings from casinos, raffles, lotteries, races, cash, and the fair market value of any prizes you win during the year such as a trip or a car. You may receive a Form W-2G from the payer which states your gross winnings, a copy of this form also gets sent to the IRS by the payer. The income still needs to be reported on your tax return even if you did not receive a Form W-2G. The casual gambler will report this income on line 21 “Other Income” of the Form 1040.

There is a silver lining though; you may be eligible to deduct gambling losses on the Schedule A, Itemized Deductions Form. You can only deduct losses to the extent of your winnings. As an example, if you won $1,000 from the lottery the maximum gambling losses deduction amount you may qualify for is $1,000.

Please consult your tax advisor on all the above information and “Like” us on Facebook for your chance to win gift certificates to great local restaurants, www.facebook.com/veseyandcompany.

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