Even if gambling isn't your full-time profession and your participation is limited to casual excursions, your winnings can still be counted as income by the IRS. Before consulting a Las Vegas CPA, you can take steps to account for and substantiate your gambling profits and losses before tax time. This will make it easier to file your taxes and prevent you from under-reporting your income.
Keep a Gambling Diary of Profits and Losses
Recording your gambling profits and losses in a personal diary can be useful for substantiating your gambling income when filing your taxes. Make sure that your diary contains the date and precise location of the amounts that you won or lost. In a separate file, keep the verifiable documentation that supports your diary entries, such as bank statements, wagering tickets and casino receipts.
Remember That Not All Gambling Profits Are Cash Earnings
Use the Fair Market Value (FMV) of your in-kind earnings. Sometimes you might win a paid vacation or a new car. The FMV is the price that your item would be worth if you'd bought it on the open market. If you have difficulty calculate the FMV of your non-cash gambling profits and recording them for tax purposes, you might want to contact an expert for CPA Las Vegas advice.
Deduct Professional Gambling Expenses
You can always deduct your gambling losses for tax purposes, whether you're a casual or a professional gambler. The only limit for gambling losses is that they not exceed your reported gambling income. However, if you're a professional gambler, you can calculate the total of your business expenses and deduct them from your income. These expenses might be casino entry fees, minimum bets, or travel expenses. If you're unsure as to whether amounts you've spent count as professional gambling expenses, you may want to seek counsel from a CPA.