In Michigan, gamblers at the casino are required to report any and all winnings on their tax returns. However, you cannot deduct your losses. If you play cards, pull slots, or gamble in any other way your winnings are taxable. Here are a few tips to help steer clear from trouble with the IRS:

1. Keep Your Receipts: Keep track of all your winnings and losses when gambling. If you do so, you have a personal record of when you gambled and how much you won. If you were ever in trouble because of gambling, you have these records to help prove your case with the IRS. Also, keeping records of your winnings will make reporting your tax return a much smoother and more efficient process.
2. Report all Gambling Income to the IRS: If you win on a slot machine, you MUST report it to the IRS. Other income from gambling includes horse racing and casinos. In addition, gambling includes non-cash and cash prizes. When filling out a report to the IRS, use the fair market value of non-cash prizes such as cars and vacations.
3. Report your Winnings Using a Form W-2G: When winning big at the casino, the payer may give you a Form W-2G, Certain Gambling Winnings. The payer will fill out a copy of this form and send it to the IRS. It is the winner’s responsibility to fill out their own W-2G and report it to the IRS. It is important to fill out the form with the correct amount. In some cases, you may not receive a Form W-2G.
4. Report your Winnings on your Yearly Tax Return: When filling out your yearly tax return, be sure to report your gambling wins of the year under “Other Income.” Whether you filed a W-2G or not, reporting your winnings on your tax return is imperative.
5. Deduct Your Losses: You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference. Note: In Michigan you cannot deduct your losses.
6. Have a Question? Don’t be Afraid to Ask: Some of the biggest regrets of gamblers is never asking for help. This is how you build up your debt, making it even harder to become debt free and stress free.
7. If in Trouble, Contact a Tax Resolution Firm to Help Settle your Debt: In many instances, gamblers do not realize they must pay taxes on their winnings. If you cannot pay what you owe, call Lothamer Tax Resolution.  At Lothamer, a team of specialized tax attorneys are on your side to help settle your debt with the IRS.

If you find yourself in a tax problem where you cannot pay off your winnings, it’s in your best interest to try to reach a resolution with the IRS or State of Michigan before they come after you. Contact Lothamer Tax Resolution at (877) 472-0021 and schedule your initial consultation.  We can go over a step-by-step plan of the best and affordable way for you to get your life back on track. Your success is important to us. Don’t wait another minute – call today.