Tax Tip: Save Those Scratch Off Tickets
All gambling and lottery winnings are taxable as income, even your $20 winning scratch off ticket. This includes Bingo, scratch off tickets, lottery tickets, and slots. Even if your winnings are not subject to withholding and you do not receive a Form W2-G.
So while the bad news is that you have to report these winnings on your tax return, the good news is that you are allowed to deduct your gambling losses up to the amount of your winnings. Of course, you have to be able to prove your losses and report them on Schedule A (itemized deductions).
Every year, designate an envelope or folder for losing tickets, receipts, or any other documentation proving your expenses and losses. Alternatively, you can keep a diary of your winnings and losses. Your diary must contain the following information:
- Date and type of your specific wager or wagering activity
- Name and address or location of the gambling establishment
- Names of other people with you at the gambling establishment
- Amount(s) you won or lost
Those receipts or diary entries will come in handy when you hit it big!
