Most people receiving Form W-2G know their gambling winnings must be reported as taxable income. Even if a W-2G is not received, the law requires all gambling winnings to be reported. The IRS explains that gambling income includes not only winnings from lotteries, raffles, horse races, and casinos, but that it also includes cash winnings and the fair market value of prizes, such as cars and trips. Winnings are reported on the first page of Form 1040, and are not allowed to be directly offset by gambling losses.
Taxpayers that itemize deductions can report their gambling losses on Schedule A. Losses, however, can only be deducted to the extent of gambling winnings. The IRS says that to deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.
As we've said before, one of the most common questions we get is about how to deduct the business use of your vehicle. This type of deduction is fully allowed, and as CPAs we encourage you to deduct the business portion of your vehicle expenses.
The easy thing to do is to say your vehicle is used 100% for business purposes, and then deduct every auto-related expense in your business. Unfortunately, the easy thing is NOT the right thing, and that kind of attitude raises red flags for tax audits. It is extremely uncommon for a vehicle to be used 100% for business purposes, and the government knows that. In reality, even any high percentage of business use is pretty rare.
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