10/27/2022 – Weekly email – Gambling and a bet with my husband

Greetings!

Jeff and I were watching TV some months back, and I asked him what time the Yankee game started. He responded, “I’ll make you a bet that Aaron Judge does not hit a home run tonight.” It sounded reasonable, so I agreed to the terms. Men, I’ll let you use your imagination, and ladies, you can guess what the bet was.

However, Jeff set me up!! There was no game that night, and he was guaranteed to win, especially since the terms favored him.😤

I was suckered into the bet and still have not satisfied the terms of the bet as he conned me. I will surely think twice before taking another bet with Jeff. He thinks I cheated on the bet and has not let me forget it.

We are taking a cruise next month, and am looking forward to spending a short time gambling. A really short time, because I am cheap and hate to lose money. Therefore, I  allocate only $25.00 to bet at the roulette table. Never know, I might win and will take home a W-2G along with my winnings. LOL! 😂

What you need to know about the IRS and gambling on a cruise ship 🎰

• Gambling winnings are fully taxable. You must report the income on your tax return. Period!
• Yes, you must pay taxes on gambling winnings when you play on a cruise ship. The money 💸 is considered taxable by the IRS.
• All gambling winnings by US citizens, regardless of where the action takes place, are considered taxable income, and you legally must be reported as such to the Internal Revenue Service.
• If you get a W-2G, the IRS knows of your win, so there’s no point in trying to conceal it. Even if the cruise ship doesn’t provide the W-2G, US citizens must report any income earned worldwide. Gambling winnings count as income.

Additionally, gambling income includes but is not limited to lottery winnings, raffles, horse races, and casinos. Cash winnings and the fair market value of prizes, such as cars and trips, are also taxable. Also, you’ll need to keep a log of your winnings and losses as a condition of deducting your losses from your winnings.

Your winnings include each win during the year, and you typically cannot offset your winnings from one day with your losses from another day to report your net winnings or losses.

Gambling and Audits

Did you know that gambling losses are often a trigger for IRS audits because most people don’t keep careful records of how much they lost while at the casino, racetrack, or another gambling establishment? While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit.

You need to be able to prove your gambling losses to the IRS. To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other documents that show the amount of both your winnings and losses.

Remember that the IRS gets a copy of the W-2G that you typically will receive along with your winnings. The IRS is expecting you to claim those winnings on your tax return.

If you receive a W-2G and do not report the income on your tax return, the IRS will probably send you a CP2000, the Underreported Income Notice. This notice will propose additional tax, penalties, and interest on the unreported gambling winnings and other unreported income.

Do casinos send W-2Gs to the IRS?

Casinos and other gaming organizations will send you a W-2G when you win

• $1,200 or more on a slot machine, bingo, and
• keno jackpots of $1,500 or
• more than $5,000 in a poker tournament,
• and all other games you win $600 or more at, but only if the payout is at least 300 times your wager.

Is the IRS auditing you for gambling winnings that you did not include in your prior tax return and perhaps are getting charged with penalties and interest? Jeffrey Schneider EA, CTRS, ACT-E can help. Please get in touch with our office today to get started on fixing your tax problem, https://thetaxreliefco.com/contact/.

Ali “I was a hoodwinked “Schneider

Director of Business Development

Ali “I was a hoodwinked “Schneider
Director of Business Development

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TAX HUMOR

Why was the seafood restaurant being investigated by the IRS?

They were suspected of being a shell company in some fishy business.

-Upjoke