buy a lotto ticket every once in a while, the IRS considers you one.

If you gamble, you are responsible for reporting your earnings and paying taxes if you won more than you lost during the year. If you lost more than you won, you get to right off the winnings. Unfortunately, the IRS will not let you claim a loss from gambling. In short, the house always wins with the IRS being the house.

If you have gambling winnings, the tax process can a bit annoying. You must file the 1040 form for your taxes because it is the only one that allows for the reporting of earnings. You want to report the winnings on Line 21.

If you have losses, you can deduct them to the extent they cancel out your winnings. Unfortunately, you can only deduct them if you itemize. In this case, we are talking about line 27 of Schedule A.

Regardless of whether you won or lost, you must keep tax records of your gambling efforts. Much like proving business mileage, you need to maintain receipts regarding payouts and the money you spent. The records should include the time and place you did your gambling. As with most tax records, you should keep these for a minimum of three years.

Article Source: http://www.Article-Warehouse.com

Richard A. Chapo is with BusinessTaxRecovery.com - providing information on taxes.

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