How to Handle Gambling Wins and Losses This Tax Season – TheStreet.com

Did you win any money from your Super Bowl pool?

Congratulations!

Now make sure you report iton your2017 tax return.

Yep. Gambling winnings of any kind are taxable income, and Uncle Sam wants his cut.

So if you had winnings from the Super Bowl, a fantasy league or even the local lotto, make sure you tally them all up with the money made in Vegas last year.

All gambling winnings are reported as "Other Income" on line 21 of your Form 1040.

Your losses, on the other hand, are limited.

You only can deduct your losses to the extent of your winnings, says Nathan Rigney of The Tax Institute at H&R Block.

So if you won $1,000 last year but lost $1,500, you can only report $1,000 in losses.

The other $500 is, well, lost.

And you can't carry those losses back or forward, like you can in other situations, notes Cari Weston, director of tax practice and ethics for the AICPA.

It gets worse. Your losses are reported on line 28 of your Schedule A - Itemized Deductions.

So if you are a high earner, your itemized deductions may be reduced because of the overall adjusted gross income limitation. Then you won't be able to deduct the full amount of your gambling losses.

The good news is that losses from one kind of gambling are deductible against gains from another kind.

So let's say in 2016 you played the lotteryevery week at $10 a pop and didn't win a thing. But you did hit it big at your Church bingo night and won $3,000. Since you had winnings, you at least can take a deduction for the $520 you dropped (wasted) on the lotto.

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How to Handle Gambling Wins and Losses This Tax Season - TheStreet.com