In 2021, every gambler can claim his gambling losses on his taxes. Do you know how to report gambling losses and winnings? If not, here is a brief guide that will help you to do it the right way.
Every gambler or bettor has to know how to report his gambling winnings and losses. Why? As you know, any money you win in any gambling game is subjected to taxes. It doesn’t matter whether you have won a small sum on bets or hit the main lottery jackpot – you have to pay a certain amount of money to the government. Although not every gambler is happy with it, there is another side of the coin.
Let’s turn to one of the online casino guides for beginners to learn why you should claim your gambling winnings and/or losses.
Why gamblers have to report gambling losses and winnings?
As we have already mentioned, each and every sum you win in a casino or at a betting site is subjected to taxes. However, the percentage of winnings is usually fewer than the frequency of losses. To benefit from losing money on gambling, everyone is recommended to track his gambling successes.
Making records of gambling losses and winnings is helpful when it comes to taxation. This is a time-tested way to reduce your taxes because most gambling/betting losses are tax deductible. To claim them, however, you need to report all the money you win as well as taxable income on your return. That’s why having the journal of your wins and losses is essential. Now, let’s see how you can report your gambling losses in 2021.
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How to claim your gambling losses?
Claiming the gambling losses is not too complicated. If you are a keen bettor or gambler, we recommend you remember this information to reduce your taxes at the end of the year.
So, what should you do? First of all, you need to track your gambling/betting successes in a special journal. It must include the following information:
- Date and location
- Type of gambling
- Person (people) who were gambling with you
- The money you have won or lost
According to the latest online casino news, the next step is figuring out whether you can claim your gambling losses or not. Usually, most gamblers can do so if they are involved in one of the following gambling activities:
- Sports betting
- Casino games
- Poker games
- Horse racing
- Dog racing
- The lottery
- Raffles
So, if you are playing one of the games mentioned above you can apply. However, pay attention that you can’t claim more than you win that year. To make it clear, let’s suppose that your gambling winnings are $1000 and your losses are $800. It means that your tax deduction is limited to $800 as there is no chance to get back more money.
All the documents you need to report gambling losses
The final step is collecting all the documents you need to report your losses. The US citizens have to report it to the Internal Revenue Service (IRS). So, to apply you have to have the following documents:
- Your gambling records (journal)
- Form W-2G and/or Form 5754
- Wagering tickets
- Receipts from a casino or sportsbook
- Canceled checks and/or credit records
