I share this as a public service warning, because it has been a
running issue with my son and the preparation of his income taxes. I am retired CPA, prepare his taxes and we get into arguments on this. To comply costs him money every year, adding to his usual losses. Maybe he should get another tax-preparer ??
Many people, especially younger ones, do not know that
all gambling winnings (not just those reported on Form W-2G) are fully taxable and must be reported on tax returns. They are reported
gross, not net, on Schedule 1, Other Income, line 8a, on Form 1040. Gambling losses are deductible to the extent of winnings and are reported as an itemized deduction on Schedule A, Other Itemized Deductions, line 16, on the Form 1040.
The laws for deducting gambling losses on state returns varies, as there are some states that
do not allow the deduction of losses. Kentucky is not one of them, as gambling losses are deductible on Schedule A, Other Miscellaneous Deductions, line 12, on Form 740. There are horror stories about heavy gamblers who live in states that do not allow deduction of gambling losses, where the tax on gross gambling earnings is very substantial.
This is much less expensive an issue for folks who are already itemizing deductions.
I guess the gaming industry lobby is pretty strong, as it would only make sense for your social security number to be obtained before wagering. There is probably quite a bit of income tax that is uncollected by Federal and State governments.
If you have questions or concerns, it would be very wise to consult with your CPA or tax-preparer to avoid issues down the road ... if your returns are selected for audit.
GOOD LUCK to everyone with this issue.
or going out to eat today, or on pills and hookers. I don't drink and take pills so my income is fine and since I'm a chef I don't spend money at ****** restaurants which leaves me money to have fun on today.
