PORT WENTWORTH, Ga.
Now as you scanned your tickets for the winning lottery numbers on Wednesday night, and discovered that you might not be the the winner of the big billion-dollar jackpot, it may not be a total loss…at least when it comes to filing your taxes.
Because even if you were to win a fraction of the jackpot, you can deduct a certain amount of the money you spent to win the cash prize–on your tax return.
News 3’s Courtney Cole spoke to the owner of Liberty Tax Service in Rincon to learn more about how this works.
“Thank you very much sir, have good luck.”
And many were hoping that luck would be on their side tonight as the Powerball numbers were announced.
“That’s your lucky one..I’m going to win this!”
But when it comes to filing your taxes, it’s the amount that you lose that could actually make you a winner–at least according to Richard Barrero–the owner and general manager of Liberty Tax Service in Rincon.
“You can deduct gambling losses up to the amount of your winnings,” Barrero said.
Basically that means you can deduct up to the amount you’ve won when it’s time to file your taxes.
So let’s say you win $5,000, but paid $10,000 to win that prize.
You can deduct up to $5,000 on your tax form.
“It reduces your income. If you win more than $600, you’re going to get a 1099 from the state or whatever, and you’re going to have to claim that as income,” Barrero told News 3.
And reducing your income is good, because it ultimately decreases the amount of taxes that you pay.
But since you don’t necessarily get receipts when you’re gambling, how can you prove how much you’ve spent to win your jackpot?
Barrero suggests keeping some type of diary for your winnings.
“I mean, planning ahead-I would advise anyone, if you’re playing the lottery, just keep some sort of receipts, keep some sort of a record that you’re buying, paying this out to buy lottery tickets.”
Barrero tells me it’s important to keep a record, because if the IRS were to audit you, you would need to have some concrete way to show an IRS agent that you’ve really spent the amount that you’re claiming–on gambling.