The gross amount of a taxpayer's gambling winning is taxable. Gambling losses may not be "netted out" of the gross winnings. Gambling losses may be deducted only as an itemized deduction on schedule A and only to the extent of winnings.
Withholding of income tax from certain gambling winnings is required. If a taxpayer had gambling winnings from which tax was withheld, he will have a Form W-2g which should be attached to, and filed with, Form 1040. Winnings are reported on line 21, Form 1040. The tax withheld is included with taxes withheld from Form W-2 on line 57, Form 1040.
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