Congratulations on Winning Something! Before spend any of the winnings, you should know that gambling winnings are taxable like most other income. During tax time do not be surprised to receive a W-2G reporting all your gambling winnings. Usually, you receive W-2G if you have more than $600 in winnings or the payout is 300 times the wager. Gambling winnings or prizes are usually in monetary form, but you can receive tangible items as well. For example, you may receive a new jewelry, new car, or even a vacation as a prize and you would still have to report the fair market value of the goods or services you received.
Gambling winnings are reported in Other Income of the 1040 Individual Tax Return Form and to match your gambling winnings, you report gambling losses on Schedule A for Itemized Deductions.
Below are ways to save taxes on Gambling Winnings:
Keep Detail Records of All Your Gambling Losses.
You can choose to keep raffle tickets, scratch-offs, lottery tickets, receipts and statements from Casino. Some Casinos provide a statement of how much you lost if you signed up for the member rewards program. You can also keep a journal of all your gambling losses.
Keep Other Records for your Schedule A.
Since Gambling Losses are reported on Schedule A, you would have to choose between Standard Deduction or Itemized Deduction to arrive at your net taxable income. At the end of the year, your goal is to record and accumulate enough documentation to increase your chances of using Itemized Deductions for the year. Included in Schedule A are your charitable contributions, medical expenses, and taxes paid. If you won a significant amount of money, you should speak to your Certified Public Accountant to maximize your tax savings.
Determine the Value of non-cash winnings.
If you win anything other than cash, you should take sometime to identify the value of your winning. Only the fair market value of your winning is reported on your tax return. If you receive one of a kind signature memorabilia or an antique, you should consider obtaining an appraiser. You can also ask the organization who had a contest, they usually know the value of the prize.
Consider Donating It Back.
If you receive winnings from a Charity Bingo or Charity Poker Night at your church or other charity, you can choose to donate all your winnings back to charity. You can feel good winning and giving and there will be no additional taxes at the end of the year.
For any questions about taxes on gambling winning or any other income, please donâEUR(TM)t hesitate in contacting a CPA in Philadelphia or visiting our website at www.excellencetaxservices.com
Gambling winnings are reported in Other Income of the 1040 Individual Tax Return Form and to match your gambling winnings, you report gambling losses on Schedule A for Itemized Deductions.
Below are ways to save taxes on Gambling Winnings:
Keep Detail Records of All Your Gambling Losses.
You can choose to keep raffle tickets, scratch-offs, lottery tickets, receipts and statements from Casino. Some Casinos provide a statement of how much you lost if you signed up for the member rewards program. You can also keep a journal of all your gambling losses.
Keep Other Records for your Schedule A.
Since Gambling Losses are reported on Schedule A, you would have to choose between Standard Deduction or Itemized Deduction to arrive at your net taxable income. At the end of the year, your goal is to record and accumulate enough documentation to increase your chances of using Itemized Deductions for the year. Included in Schedule A are your charitable contributions, medical expenses, and taxes paid. If you won a significant amount of money, you should speak to your Certified Public Accountant to maximize your tax savings.
Determine the Value of non-cash winnings.
If you win anything other than cash, you should take sometime to identify the value of your winning. Only the fair market value of your winning is reported on your tax return. If you receive one of a kind signature memorabilia or an antique, you should consider obtaining an appraiser. You can also ask the organization who had a contest, they usually know the value of the prize.
Consider Donating It Back.
If you receive winnings from a Charity Bingo or Charity Poker Night at your church or other charity, you can choose to donate all your winnings back to charity. You can feel good winning and giving and there will be no additional taxes at the end of the year.
For any questions about taxes on gambling winning or any other income, please donâEUR(TM)t hesitate in contacting a CPA in Philadelphia or visiting our website at www.excellencetaxservices.com