Gaining from a Poker Loss
Did you lose while gambling this year and hope to break even somehow? Relax your worries, because not all is lost. Gamblers actually may be eligible for tax deductions to help cut their losses. You can participate in your favorite card sport and still cash out even.
As with any deduction, there are statutes and limitations. You are only allowed to collect on your largest monetary win of the year. For example, if you won $1,000 on table games during that particular year, that is your limit. It is based solely on what you won, not what you lost. The rule is applicable to amateur poker players and professional gamblers and is all encompassing. Gambling debts are combined whether it be scratch offs, or casino losses, into one lump sum.
Claiming Deductions
There are a few different ways of how to go about claiming your gambling deductions. If you are an amateur gambler, be sure to itemize your losses. You will want to find line 28 of Schedule A and jot your itemized deductions down on the provided lines. The only losses allowed to be documented are actual wages; travel expenses and other costs will not be reimbursed.
Professional poker players can still claim tax deductions, but there is a different way to file. You must report your annual winnings on line one of Schedule C of form 1040. You may claim your losses and up to 50% of food and travel expenses on the provided lines.
Warning:
Please note that the IRS will receive copies of all winnings that exceed $600. It is important to remain honest and not fabricate winnings in an attempt to receive more money back from the government. Make sure that your winnings match any reported profits listed on your W-2G forms. It is very important that information be documented as accurately as possible, any winnings should have a corresponding date and time if possible.
Whether you are an avid or novice gambler, there is something in this for everyone. Depending on how much money you earned gambling, you are entitled to apply for tax deductions. This could be more promising than just succumbing to the loss as you have probably done in the past.
