Tabulating Wins and Losses
There are several good reasons for keeping a simple diary or log of your gambling wins and losses. First, you'll need such a document if you've claimed winnings and losses and subsequently get audited by the IRS. Second, a diary helps you keep track of the money you're spending on gambling. Third, a good diary can show you where your betting strategy or playing skill needs improvement.
A gambling diary doesn't have to be complicated. Many players use a small notebook to keep track of their wins and losses; others later transfer the information to a spreadsheet or other report on their home computers. Your gambling diary should include the following information:
Date
Time
Name of casino
Game
Machine or table number
Initial bankroll
Cash out
Net result (losses in parentheses)
Say you spend a weekend at the Borgata in Atlantic City, playing mainly blackjack and the slots, with a brief keno session one day. Here's what your gambling log for that trip might look like:
Date |
Time |
Casino |
Game |
Machine/Table |
Initial Bankroll |
Cashed Out |
Net |
8/31 |
7–9:30 P.M. |
Borgata |
Blackjack |
6 |
$400 |
$520 |
$120 |
8/31 |
10–11 P.M. |
Borgata |
Lucky 7s |
1834 |
$50 |
$13 |
($37) |
9/1 |
8–10 A.M. |
Borgata the Dough |
Thro |
1022 |
$100 |
$112 |
$12 |
9/1 |
Noon–4 P.M. |
Borgata |
Blackjack |
11 |
$200 |
$315 |
$115 |
9/1 |
7–8 P.M. |
Borgata |
Keno |
$35 |
$18 |
($17) |
|
9/2 |
10 A.M.–3 P.M. |
Borgata |
Blackjack |
4 |
$500 |
$210 |
($290) |
Some tax experts also recommend that your diary include the address or location of the casino or other gambling establishment, as well as the names of any people who accompanied you at a given session. In most cases, however, the name of the casino or gambling establishment should be sufficient.
In case of an audit, an accurate gambling log can be your saving grace. Tax courts have been unsympathetic toward gamblers who merely estimate their wins and losses without the proper supporting documentation. Also, because the requirements for filing W-2G forms are far from all-inclusive, tax authorities are almost automatically suspicious of anyone who claims only the gambling wins reported on W-2Gs.
Some players like to keep separate diaries for each type of game they play. This can be helpful in determining where you spend most of your gambling budget and which games you tend to win at more often. Since it's human nature to remember the wins and let the disappointing losses fade from memory, diaries also offer an objective look at your gambling habits and give you the information you need to decide whether the money you're investing is worth the recreation value you receive.
If you use your player's club card faithfully, at the end of the year you can ask the casino(s) for a report detailing your activity throughout the year. Information contained in this kind of report varies from casino to casino, but usually it includes coins in/coins out, dates, times, machine numbers, etc. It's a good backup for your own records.
Online Gambling Records
Several states have outlawed Internet gambling and several other states are considering outlawing it. Many credit card companies, under pressure from the federal government, have prohibited customers from using their cards to set up online gambling accounts. Nevertheless, gambling on the Internet is quite prolific, and, as previously noted, the IRS considers all gambling income — whether technically legal or not — as taxable. If you engage in online gambling and elect to declare online winnings and losses, you'll need to have documentation to support your claims.
Some online casinos offer logs to their players that track the players' transactions and play. These logs may be available on a weekly or monthly basis; if they are, you should print them out and keep them on file. Also, you can sometimes print so-called “screen shots” while you're logged into your online casino. These are snapshots of your activity as shown on your computer screen and can be useful as supporting documentation.
