If you are a small business, listen up! The Small Business Administration (SBA) has some great news for businesses that are still struggling through the pandemic. In December 2020, Congress voted to allocate an additional $284 billion to the Paycheck Protection Program (PPP). The PPP is a forgivable loan program established by the CARES Act. The SBA and the Treasury Department have reopened the PPP loan portal, so small business owners, like you, will be able to apply for extra aid. You’ll have to act fast, though, because the deadline for new loan applications is March 31, 2021. Learn more.
Can I write off my gambling losses? Do I have to claim my gambling income?
By Andrea MacDonald, CPA
The IRS expects you to report all of your gambling winnings, whether you receive a tax form or not. Gambling losses are tax deductible, but only to the extent of your winnings. However, the losses are only deductible if you itemize your deductions. If you take the standard deduction, you cannot reduce your taxable income by your gambling losses.
What do I need to keep track of?
- Horse and dog races
- Casino games
- Poker games
- Sports betting
What should my log include?
- The date and type of gambling in which you engaged
- The name and address of the places where you gamble
- The people you gambled with
- The amount you win and lose
What if the IRS requests proof? What can I provide?
- Form W-2G
- Form 5754
- Wagering tickets
- Canceled checks or credit records
- Receipts from the gambling facility
So, if I can only write off losses up to the amount of my winnings, what happens to the extra losses?
- Sadly, you do not get to carry those forward to future years. This deduction is a “use it or lose it” deduction.
Do I really have to report the winnings and the losses separately or can I net the amount and report that?
- The IRS does not allow you to net your winnings and losses together.
- You must report your gambling winnings on the front of your 1040, and the gambling losses on your Schedule A – Itemized deductions (but again, only if you itemize).
What is a Form W-2G? What is a Form 5754?
Great news! The tax pros at Pro Tax & Accounting can answer these questions!
Tax season can be a stressful time of year, but it doesn’t have to be. If you keep your tax records organized year round, you’ll have a much easier time filing your taxes. And if you store and organize your records, you’ll have no issues if the IRS comes knocking. Do you want more information about maintaining your tax records? How about an expert to do your taxes for you? Call Pro Tax & Accounting today!
If reading this has created more questions, contact our office. Call (757) 420-1539
Andrea MacDonald, CPA is the owner of Pro Tax & Accounting in Chesapeake, Virginia. For nearly two decades, she has been working with businesses on their bookkeeping, accounting and taxes. She also works with individuals and families on their tax returns. Andrea is a Certified Public Accountant (CPA) and a qualified bookkeeper and tax professional. She is well-versed in tax law, which makes her an invaluable resource for any business.
At Pro Tax & Accounting, we keep you from breaking the bank!
Pro Tax & Accounting is your go-to resource for businesses bookkeeping, accounting services, payroll, QuickBooks Consulting and tax services. President and owner, Andrea MacDonald, CPA, is a Certified Public Accountant. Andrea and her team have the education, knowledge and experience and work with businesses throughout the Hampton Roads Virginia cities of Chesapeake, Norfolk, Virginia Beach, Suffolk, Newport News and Hampton, north into Williamsburg and throughout the mid-Atlantic region. And thanks to technology, Pro Tax & Accounting can work with clients anywhere in the world!
Call today and free up the time you need to run your business, and leave the bookkeeping and accounting up to the experts!
Call Pro Tax & Accounting for your
Bookkeeping & Accounting Services. (757) 420-1539