Accounting for gambling proceeds on a tax return

Maryland residents who gamble casually should report all of their winnings on their federal income tax return. Individuals should also report the fair market value of any prizes won such as a car or vacation. Examples of gambling include playing the lottery or betting on horses at a track. Money won at a casino is classified as gambling winnings as well.

Parties that pay individuals their winnings may be required to send a Form W-2G. The amount recorded on that form should be listed as other income on a Form 1040. Any additional winnings not listed on such form should also be reported as other income, and it may be necessary to pay estimated tax on winnings. Losses may be deducted up to the amount reported on a tax return, and it can only be deducted by those who itemize deductions.

Individuals who are engaged in recreational gambling may find multiple ways to make money while having fun at the same time. However, those who make money from their endeavors may experience many consequences by not reporting the winnings on a tax return. For instance, it may be possible to be charged interest on any taxes owed as well as a penalty for not reporting income depending on how much was not reported.

Those who have been contacted by the IRS can negotiate with the agency on their own, but it may be advisable to have an attorney do so instead. This may be beneficial because information obtained during an audit could potentially widen its scope.

No Comments

Leave a comment
Comment Information

Contact Kundra and Associates Today

Please call our offices at 301-637-8130 or fill out the form below to arrange a confidential consultation.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Email Our Attorneys

Rockville Office
110 North Washington Street
Suite 406
Rockville, MD 20850

Phone: 301-424-7585
Fax: 301-424-7047
Rockville Law Office Map

Washington, D.C. Office
1025 Connecticut Avenue NW
Suite 1000
Washington, DC 20036

Phone: 301-637-8130
Fax: 301-424-7047
Map & Directions

Mumbai, India
C/o Anmol Sekhir Consultants Pvt. Ltd.
Chartered Accountants
3rd Floor, Sahakar Bazar
Opposite Railway Station
Bandra (West), Mumbai, India 400-050

Phone: 301-637-8130
Map & Directions