CPA: Don't Gamble With The IRS, Report Winnings and Losses
COUNCIL BLUFFS(KPTM)-Waiting until the deadline to turn in your taxes may be considered a gamble by some. But for those who actually like to wager cash, a bigger risk is not reporting your wins and losses to the IRS.
Gordon Fox found out the hard way, that hitting the jackpot doesn't come without a price. Ten years ago, he won $13,500 playing high-limit slots at Bluff's Run, which is now the site of Horseshoe Casino, a place he likes to go to play the slots.
When Fox didn't report his winnings, Uncle Sam came to him for a cut. "I found out I had some tax liability because I did not use my Win/Loss statement." Fox says he eventually settled debt, but he did learn a valuable lesson.
"People need to know that if you have gone gambling and you win money that that is reportable income on your tax return," said Rachel Murley of tax preparer Jackson Hewitt. Murley says, technically you should report all winnings.
But winners are required to produce a social security card when they win $600 or more (and that amount is 300 times your bet) at a horse track, $1,200 at a slot machine or bingo or more than $1,500 in Keno to help Uncle Sam keep track.
Fox says keeping a record is actually a good thing because while you must report gambling income, you can also deduct losses. To do that, he uses a player's card. "If you keep track and use your card, you can deduct winnings and losses to offset each other at the end of the year," he said.
But there is there is a limit- you can't deduct more than you win. "It can only be up to the amount of the winnings that you have. So, if you won a thousand dollars, you can only claim a thousand dollars in losses," said Murley.
Fox says he even gets a statement of his wins and losses at the end of the year that he can bring to his accountant. "Always use your card for your benefits and your taxes," said Fox.
Meanwhile, Council Bluffs casinos are making the most of tax day. Offering hard-working tax preparers a free buffet Wednesday morning. Tax perparers and CPA license holders will receive a complimentary buffet at the Fresh Market Square Buffet at Harrah's or Village Square Buffet at Horseshoe. But they do have to provide proof to get that free meal .