Basketball fans everywhere were on the edge of their seats this weekend as Notre Dame nearly ended Kentucky’s perfect season in a nail biter. After the game, brackets everywhere remained mostly intact and folks who had picked Kentucky to win it all in the office pool breathed a sigh of relief.
I’m fifth in my pool right now but statistically, I could still finish second (thanks Villanova). Lucky for me, I didn’t bet money on the games. As much as I love sports – especially my ACC basketball – I don’t have the stomach for gambling. I am, after all, the same girl who gambled $1.50 all week in Vegas. I hate to lose. And I really hate to lose money.
If, however, you’re one of the millions of taxpayers who do like to gamble on a casual basis, take heart. When it comes to taxes, the rules for casual gamblers aren’t terribly complicated.
The law requires you to report your gambling winnings no matter what the amount or whether it’s a legal bet. There’s no exception for illegal wagers: income is income so far as the Internal Revenue Service is concerned. Casual gamblers report their winnings on line 21 (other income) of a federal form 1040; the form 1040-EZ isn’t equipped to handle gambling winnings.
But what if you, like me, lose? Unfortunately, while you must claim all gambling winnings on your return, you can only deduct your losses if you itemize your deductions on a Schedule A. If you do not file a Schedule A, you cannot deduct your gambling losses, no matter how much you lose.
If you do itemize your deductions, you must be able to document your losses. You need to substantiate the amount of the loss, the date of the loss and the name and location of the gambling establishment. Be smart and keep a journal of your gambling wins and losses: chances are, your buddies at the office aren’t going to be in the mood to issue you a form 1099-G. Ditto for your extra large bookie in the bar corner.
What if you lose more than you win? Sadly, you’re out of luck. Not only does it stink to keep losing, you cannot deduct more in losses than you report in winnings.
To keep you on your toes this tax season, we have a fun giveaway. You can win a version of the newly updated edition of Tax Help For Gamblers, available exclusively as an e-book. In the book, you’ll find out how to report gambling wins and losses including those winnings from fantasy sports, figure out how to get your tax docs online and get the latest updates on court rulings and new rules for reporting and deducting funds. The book is authored by Jean Scott, who is a veritable spokesperson for low-rolling gamblers nationwide.
To enter to win, just answer this question:
Who did (or do) you pick to win the NCAA Tournament?
Entries must be posted in the comments section for this blog post in the space below by 10:00 p.m. EST on Wednesday, April 1, 2015. It’s just that easy. You don’t have to choose the actual tourney winner. I’ll simply choose two winners randomly (using a number generator) out of all of the qualifying entries: each winner will receive a version of e-Book on a platform of your choosing.
Be sure and read the fine print for more rules because, as you know, I’m a lawyer and I like rules:
- Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts.
- I love my Twitter followers and my Facebook fans but for this particular giveaway, tweets and Facebook comments will not be counted. Ditto for emails. You must leave your comment on the blog at this specific post.
- Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest. Similarly, pingbacks and other links will be disregarded for purposes of the contest.
- I will need your full name and your email address: be sure to use your real information when you register to leave a comment. I won’t publish your email address but I do need contact information for the winning entry. If you win and I can’t reach you, it’s a forfeit.
- Due to shipping and legal considerations, you must have a valid United States address. Sorry, Canada, eh?
- I respect your privacy and I will not send you anything unrelated to your entry in this contest. By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
- Like Judge Judy, my determination is final.
- Prizes are provided directly by the authors, publishers and/or PR folks are not exchangeable or redeemable for other prizes. Those providing prizes do not pay for placement and do not receive any compensation for contributions – neither do I! I have no affiliation, paid or otherwise, with any of those providing prizes.
- If you aren’t allowed to participate in giveaways because of the laws in your state or your age or an agreement you’ve made with your mother, consider this giveaway not applicable to you. In other words: void where prohibited or restricted.
- Finally, the giveaway is about me, me, me. It’s not affiliated with or endorsed by Forbes. So leave them out of it, okay?
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