Glenda P asked:
should have been more specific
is it true there is a cap of 74000 on your losses even though u have a win/loss
form stating your losses far exceed your wins
the 140000.00 is annual income
given the recent inf i received from the irs
my win to loss has a cap because of this annual income i realize the loss has nothing to do with basic deductions however apparently the win/loss rule is not being applied not only that this recent inf from the irs is for the yr 05 w/penalties and interests applied all win/loss inf was given in 05 w/all proper tax forms so why now
Angela
should have been more specific
is it true there is a cap of 74000 on your losses even though u have a win/loss
form stating your losses far exceed your wins
the 140000.00 is annual income
given the recent inf i received from the irs
my win to loss has a cap because of this annual income i realize the loss has nothing to do with basic deductions however apparently the win/loss rule is not being applied not only that this recent inf from the irs is for the yr 05 w/penalties and interests applied all win/loss inf was given in 05 w/all proper tax forms so why now
Angela
Tags: Gambling Winnings, Tax Bracket, Wins
Jeremy
Gambling winning is taxed as an ordinary income. If you have a gambling income over and above your taxable income of $140,000 then it will be taxed as per your highest tax rate.
For Single the tax rate for taxable income between $77,100 and $160,850 is 28%. Above $160,850 tax rate is 33%.
For Married Filing Jointly the tax rate for taxable income between $128,500 and $195,850 is 28%. Above $195,850 the tax rate is 33%.
Francis
There is no cap on the amount deducted as gambling losses. However, gambling losses can be deducted only up to the amount of gambling winnings.
If you won $140,000 and lost $200,000, you would put $140,000 on the “Other Income” line (Line 21 of Form 1040), and then you would put $140,000 on Schedule A Miscellaneous Deductions not subject to 2% of your AGI.
Expect to have to show documentation of your wins and losses.
Jared
The rule is that you can only deduct your gambling losses up to the amount of your gambling winnings. So if you had 100,000 in winnings and 150,000 in losses you would report 100,000 in other income on page 1 of your 1040, and 100,000 in losses on Schedule A - Itemized Deductions - other deductions (and it’s not subject to the 2% AGI threshold rule). Also, just to let you know, some states tax you on your gambling winnings but don’t allow you to deduct your losses (Massachusetts is one of those states).
Jeff
There isn’t a dollar cap on losses - the limit for the deduction, which you can only take if you itemize and is NOT subject to the 2% AGI limit, is the amount of your winnings.