By: Denise N. Fyffe.
Copyright © 2013, Denise N. Fyffe
Billions of dollars is generated by the gambling industry each year. In many cities that are gaming centric, such as Las Vegas and Atlantic City, their businesses are open twenty fours a day to cater to their clientèle. People of all nations and background do gambling. Not only that, there are numerous scratch and wins, lotto, mega million or super lotto games carried on television, and tickets can be bought in corner stores. Because of this, the revenue generated on a daily basis is substantial. Governments see this as an opportunity to use tax the funds and cover many fiscal costs for their country; hence the taxation on any form of gambling.
The losses from your gambling adventure are tax deductible. However, you can only do so if it is less than or equals your winning sum. Taxation is applied to any winnings, earnings, or losses incurred by gambling. This includes online and other activities such as card games, horse racing, bingo, slot machine, lotteries and the online casino or gaming versions as well. The gaming establishments are required to submit a form to the government or IRS reporting on your winnings; for that reason it is unlikely that you can get away with not paying up. If you pay taxes on your gambling losses or winnings, you will become familiar with a number of things. These include a Form 1040, losing lottery tickets, Form W-2G, and keeping the statements of from gambling losses and a diary on any gambling expenses or revenue.
Gambling establishments inclusive of race tracks, casinos, television contests, or lotteries are required by law to prepare and submit to the IRS a W-2G Form of any player who has earned cash, or kind from a game. In addition, they should give a copy of this form to the winner as well. If you win something other than cash, say a car, boat or other type of vehicle you will need to estimate the fair market value of that item. Sometimes the businesses will include this on the W-2G form that you have been given. If this is not so, then you will need to research t hat value. This may be done by going through a blue book for vehicles, or looking at other similar items, and using that cost as the value of the item.
Once you know the value, of your item, you should total what your gambling losses came to. This should be done for all gambling activities throughout the year. Then minus the amount you have lost from the amount you have won. The deduction cannot exceed how much you have won. For example, if for that year you lost thirteen thousand dollars and then you won fourteen thousand five hundred dollars, you can only deduct thirteen thousand dollars. The IRS will not cover the remaining loss value. This amount cannot be brought forward to the upcoming year either. Another important step is to list your losses on Form 1040. You will indicate the losses on line twenty eight and the winnings on line twenty one. Make sure you keep all your papers as proof in case you are audited.
- Jamaican Gambling: Are You at Risk for Problem Gambling? (theislandjournal.wordpress.com)