JK Harris, the nation’s largest and most successful tax resolution company, says that you better report all of your gambling winnings as income on your tax return or your joy will turn into sadness.
[ClickPress, Wed Feb 23 2005] NORTH CHARLESTON, S.C. – You just came back from a gambling junket where you are elated you won some money. Well, don’t go out and spend it all. JK Harris, the nation’s largest and most successful tax resolution company, says that you better report all of your gambling winnings as income on your tax return or your joy will turn into sadness.
Larry Phillips, a Technical Advisor in the area of IRS audits for JK Harris & Company and a 30-year veteran of the IRS, says gambling winnings have to be reported to the IRS, too.
“There are some people who gamble, have success and forget that they have to report their winnings,” Phillips said. “They get excited about winning and forget about the reality of reporting it to the IRS.”
The IRS says that gambling income includes, but is not limited to, winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other non-cash prizes.
The full amount of gambling winnings for the year, according to the IRS, must be reported on line 21, Form 1040. If you itemize deductions, you can deduct your gambling losses for the year on line 27, Schedule A (Form 1040). You cannot deduct gambling losses that are more than your winnings.
The IRS says it is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.
“Unfortunately, we see this type of thing from time to time,” Phillips said. “Winnings derived from gambling are just like any other gains…You have to report them.”
JK Harris prepares thousands of tax returns for its customers every year.
JK Harris & Company, LLC (www.jkharris.com) is based in North Charleston, S.C. JK Harris & Company is the nation’s largest tax resolution company with over 470 satellite offices in 45 states and has serviced over 130,000 clients since its founding in 1997 by John K. Harris. JK Harris also provides services for consumer and commercial debt, student loan debt, investment fraud, financial planning, small business services, mortgage services, tax return preparation, and assisting individuals who require support for an IRS audit.