Getting ready to head to one of the Ohio casinos, or perhaps a quick weekend getaway to Vegas? Have you thought about the tax implications of all your winnings? Of course not, that’s why you have us!

Once you’ve cleaned up at the poker table or hit a big jackpot at the slot machines, the casino will issue you a W2-G. This form will be used by the casino to report your winnings to the IRS. Even if a W2-G is not issued, you still must report gambling income to the IRS under “Other Income” on Line 21 of the Form 1040.

You want to make sure you track your losses and that you’ll be able to substantiate them, because these can be deducted if you’re eligible to itemize deductions on Schedule A. The catch is that you’re only able to deduct to the extent of your gambling gains. For example, if you spent $1,500 at the blackjack table and won $1,200, you can only deduct $1,200. If you really want to be able to claim losses from your gambling activities that offset other income on your tax return, be prepared to quit your day job and become a professional gambler. Professional gamblers report their gambling income in the same way as a sole proprietor would by using Schedule C on the Form 1040. Business expenses that are ordinary and necessary to a gambler, such as lodging and travel, can be deducted. Just be prepared to prove to the IRS that you’re conducting yourself in a businesslike manner.

Investing your extra cash into a 401(k) is always a safer bet, but there’s no harm in having a little fun once and a while!

~ Todd Figgins, CPA, EA

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