If you are a keen gambler or sports bettor, you should know how to claim gambling losses and/or winnings on your taxes. Here are some tips that will help you to determine how to do it and why it is better for you to report your gambling misfortunes.
Like any other source of income, gambling is also tax imposed. If you hit the jackpot in the lottery, in Vegas, or at any of the online casinos in the US, you will have to pay a certain amount of money for taxation. However, if you lose more often than you win, you should learn how to claim gambling losses. Let’s see why it is necessary and how to do it in 2021.
Why claim gambling losses?
Reporting gambling losses is a helpful way to reduce your taxes. As of 2021, most gambling losses are tax-deductible, however, only to the extent of your winnings. So, if you want to claim a standard tax deduction, it won’t work.
To claim gambling losses, gamblers have to report their winnings as well. As they are deductible, but only to the extent of your winnings, you need to report all the money you win as taxable income on your return.
How to claim gambling losses in 2021?
Let’s learn how to claim gambling losses if you often play casino games or bet on sports.
First of all, you need to track all your winnings and losses. This touches upon the following gambling activities you can find at online gambling sites in the US:
- Sports betting
- Horse/dog races
- Casino games
- Poker games
- Lottery and raffles
If you play one of the games mentioned above or bet on sports, you can claim your gambling losses back at the end of the year. However, you can’t get back more than you win. For instance, you have won $5000 but have lost $1000 during the year. So, your tax deduction is limited to $1000.
Information you need for reports
Finally, here is all the info you need to claim gambling losses. As we have mentioned above, the number-one document is your list of winnings and losses. They must contain the following information: date and place of gambling, type of gambling, your companion if there is one, and amount of winnings or losses.
Apart from the track of winnings/losses, you need the following documents to get your money back:
- Form W-2G
- Form 5754
- betting/gambling tickets
- Canceled checks/credit records
- receipts from the casino or its online equivalent
Now you know how to claim gambling losses on your taxes. So you can play gambling games at Intertops Casino more than ever and not be afraid of losing money as you know how to get them back!