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Taxes - if someone can learn from my mistakes

Cottage Grove...
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Taxes – if someone can learn from my mistakes

I feel like an idiot, but if someone can learn from my mistakes, then it is worth it to look like an idiot. I’ve been really stupid about my taxes the past few years. I don’t own a home, no kids, so I have never itemized. I’ve always just filed form 1040-EZ. Well, the past few years, I’ve really taken a tax hit because of winnings (which of course, aren’t really winnings). Last year I paid close to $1,000 to taxes (and the only reason it wasn’t more was because I had taxes taken out of most of my jackpots at the casino). This year it was looking to be around $2,200. I just figured because I had nothing to itemize that I just had to live with it.

WRONG, and I’m sure I’m probably the only one this stupid - but just in case.

You can include state taxes you paid during the year, so for me, that number plus my gambling losses far exceeded the standard deduction amount of $5,800 – so I went from thinking I had to pay $2,200 to practically nothing – which is as it should be, because my losses far exceeded my winnings.

I’m also working with an accountant to recover overpayment from 2009 and 2010.

For a reasonably intelligent woman, sometimes I amaze myself with my own stupidity. In my defense though - 3 years ago, I had to basically take over my father's affairs, and have neglected my own because that is so time consuming.

Edited: 10 January 2012, 20:40
Edmonton, AB, Canada
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1. Re: Taxes – if someone can learn from my mistakes

I sure am glad that gambling/lottery winnings in Canada aren't taxable...

Of course I never win anything so it's all a wash...

Roswell, New Mexico
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2. Re: Taxes – if someone can learn from my mistakes

Win-loss statements.

DC/NOVA
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3. Re: Taxes – if someone can learn from my mistakes

Don't beat yourself up. Thanks for the advice. I'm sure you aren't the only one out there who did this. Glad you found an accountant who could get you some money back.

Now go by a house so you can get a bigger deduction.

New York City, New...
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4. Re: Taxes – if someone can learn from my mistakes

On your US Income Taxes, if you're itemizing your deductions, you can also deduct your gambling losses up to the amount of gambling winnings you report, as long as you have some sort of record. From the IRS website http://www.irs.gov/taxtopics/tc419.html

"You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction that is not subject to the 2% limit.

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information. "

Edited: 10 January 2012, 20:47
Cottage Grove...
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5. Re: Taxes – if someone can learn from my mistakes

Dave, aren't the win/loss statements from casinos good enough.

Boston
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6. Re: Taxes – if someone can learn from my mistakes

Without getting to much into taxes your somewhat correct, yes you need to itemize in order to declare a gambling loss over and above your wins.

In order for you to write off say a two thousand dollar win you have to go over your standard deduction, if you were to go over it by 2 thousand then your entire wn can be written off, anything less it will just be a portion of the loss that you can write off, but every bit helps.

Tempe, AZ
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7. Re: Taxes – if someone can learn from my mistakes

Sounds like you should call H&R Block.

Cottage Grove...
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8. Re: Taxes – if someone can learn from my mistakes

DiceMan, you've totally confused me. State taxes I paid were roughly $3,600. I had around $7800 in winnings, which I can certainly offset as losses. So doesn't that mean my deduction amount is $11,400 instead of the $5,800 standard deduction.

Cottage Grove...
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9. Re: Taxes – if someone can learn from my mistakes

BoxingJohn - I did. The guy I talked to, while helpful, was a little clueless. He was trying to tell me that he thought the laws had changed and that now you could only offset 2% of your losses. I had to prove to him that he was wrong.

New York City, New...
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10. Re: Taxes – if someone can learn from my mistakes

Yes; if the statements from the casinos are complete in stating your win/loss. It's easier if you only play slots, I think. I guess I'm not used to having my winnings exceed my losses!

You're also correct to be working with a tax professional and not relying solely on the opinions of a bunch of yahoos on an internet travel forum!