(913) 239-9130 info@mccpas.com

Tax Debts:

Individuals who owe back taxes to IRS can check their balances online.The Revenue Service has a web-based tool that shows the amount of taxes due for each tax year, up to 18 months of payment history, and interest and penalties.  Users first have to go through security procedures to authenticate their identities.


Failure to report gambling winnings can draw unwanted IRS attention, especially if the casino or other venue reports the mounts of Form W-2G.  IRS has an automated program that matches data on third-party information returns, such as the W-2G, with income and deduction amounts shown on individual returns.  If there is a mismatch with a significant discrepancy, the agency will notify the taxpayer.  In this case, a recreational gambler who didn’t report winnings shows on W-2G forms heard from IRS.  The Tax Court agreed he owes tax.

Keep in mind the tax rules for recreational gamblers: It doesn’t matter whether you’re playing the slots, betting on sporting events or buying lottery tickets.  Uncle Sam wants a cut of your winnings but will not subsidize your losses.

All gambling winnings are taxable.  Losses can be deducted if you itemize and then only to the extent of winnings reported as other income on your return.  Losses are treated as miscellaneous deductions on Schedule A, but they’re exempt from the offset of 2% of AGI that applies to most miscellaneous itemized deductions.  Costs of lodging, means and other gambling-related expenses can’t be written off.

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