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Best of John G. Brokopp

Gaming Guru

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It's That Taxing Time of Year Again

19 January 2011

If you are just getting around to putting together your 2010 federal income tax information in preparation for filing your return, you may have come across the form you received from the slot attendant for winning that $1,200 jackpot way back in January of last year. You probably tucked it away in a drawer and forgot about it.

Income tax time means that it's time to remember it again. Uncle Sam certainly will! That $1,200 will have to be entered as income in the form of gambling winnings on your return. If you are eligible to itemize, kept accurate records of your casino visits during the year, and documented your losses and wins, you are eligible to deduct losses up to but not surpassing the amount you won. That's the good news. The bad news is if you didn't take the time to keep records, it's too late now.

Casino goers who are serious about gambling as a recreational and leisure time activity must be prepared if Lady Luck ever smiles with a slot machine jackpot, or a bonus award while playing a table game such as Caribbean Stud Poker or Let It Ride. It isn't all fun and games when it comes time to reporting those winnings as income. The IRS is going want to its share!

If you really want to get the low down on the income tax laws as they affect your gambling, pick up a copy of Publication 529, "Miscellaneous Deductions", from the Internal Revenue Service. Inside you'll find a section about gambling income. It makes for very informative reading for anyone who gambles for fun.

The publication advises you that you are required to report the full amount of your gambling winnings for the year. (Remember that the only time the casino will inform the IRS of your winnings is when you win a slot jackpot of $1,200 or more.) You may deduct your gambling losses for the year but you cannot deduct gambling losses that are more than your winnings.

Players cannot reduce their gambling winnings by their gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.

The best advice to maintain a record of gambling activity is to keep a diary of your wins and losses with at least four categories of information: 1. The date and type of your specific wager or wagering activity. 2. The name and address or location of the gambling establishment. 3. The names of other persons present with you at the gambling establishment. 4. The amount(s) you won or lost.

In addition to your diary, you are also advised to maintain accurate proof of your wins and losses in the form of supporting documentation. You will already have in your possession Form W-2G, Certain Gambling Winnings. That's what you received from the slot attendant when you won the jackpot.

Other forms of documentation include wagering tickets, canceled checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. If you use a player's club card every time you play slots, the casino will have a computer record of your coin-in, coin-out activity on the slots. At year's end you can request this information from the casinos to support your income tax claims.

John G. Brokopp

John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp

John G. Brokopp
John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp