Quote:
|
Originally Posted by letswastemoney
Am I supposed to report winnings even if they weren't over $600 and I didn't sign anything?
Also, let's say I break even for the year. Do I need to include that information in the 1040?
|
Technically, yes. ALL gambling winnings are taxable income, but can be offset by losses.
So, if you bet $2 on a horse to win and were lucky enough to hit the winner and got $10 back, you would report a loss of $2 and gambling income of $10.
You do not calculate the net profit of $8 and add it to your income.
Instead your winnings are netted out in two steps ... you are supposed to report EVERY DOLLAR you collect. This gets added to your Adjusted Gross Income. You then report the losses as an Itemized Deduction. This will net your winnings.
Straight from the IRS website:
"All gambling winnings must be reported on your Form 1040, including winnings that are not subject to withholding."
"You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction."
http://www.irs.gov/taxtopics/tc419.html
