I filed the 1040ez for 2009 and had gambling winnings of 2500.00. I got a notice from IRS that I owe an increase of 625.00.
It was reported on a w-2g I did not file a sched. A.
How can I report my gambling loss of up to 2500.00
Since I have already filed the 1040ez.
Or am I destined to pay this amount.
I certainly lost more than I earned.
In most cases, so long as the statute of limitations has not run, you can file an amended return. The statute of limitations for most individual tax returns is three years from the date the return is due or the date of filing, whichever is later; see this prior post for more information about the IRS and statute of limitations.
You file an amended return by using a federal form 1040X (downloads as a pdf). Read the instructions carefully.
All of that said, you have a bigger problem here which is that I am guessing you did not file a Schedule A because you do not have enough deductions to itemize. For 2009, the standard deduction is $5700 for an individual taxpayer – you need at least that much in deductions before it makes sense to itemize. Unfortunately, while you must claim all gambling winnings on your return, you can only deduct your losses if you itemize. So, if you’re not filing a Schedule A, you cannot deduct your gambling losses.
You cannot use a form 1040-EZ to report gambling winnings. “Casual gamblers” (in other words, nonprofessional gamblers) must report winnings on line 21 (other income) of a form 1040. The form 1040-EZ isn’t equipped to handle gambling winnings or the forms W-2G (which are the forms issued to you when you win).
There are some additional rules with respect to gambling losses. You must be able to document your losses by type of loss, date, name and location of the gambling establishment and amount. You will need records of your losses. And finally, you cannot deduct more in losses than you report in winnings; even though you stated you lost more than you earned, your actual deduction is limited to the smaller of the two.
In a nutshell, the actual gambling is a lot more fun than the reporting. If you’re having trouble figuring it all out, make sure that you check with your tax professional.
Like any good lawyer, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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