I hate to bring up an always-irritating subject, but the sooner we start thinking about how we are going to handle our gambling numbers on our tax returns the less likely we will be scrambling around the middle of April.

Here’s what Brad and I have that makes our 2007 tax reporting easier (and the IRS happier): 

1.      A gaming log. Ours is a small daily-calendar book in which we write down the details of each gambling session. At the end of each month is a summary page that gives the totals separately for winning and losing sessions for that month. At the end of the book is a summary of those monthly totals, again with a separate number for winning and losing sessions for the year.

2.      A file folder with all our W-2G’s, which we have carefully collected and saved all year. If I were a little more organized, these would be arranged consecutively according to the date. But since I am always “behind,” I throw them in a folder and that’s Brad’s job to sort them at the end of the year.

3.      A folder filled with all our gambling expense notes and receipts. Since we file as professional gamblers (in a S Corp) we need a detailed list of all gambling-related expenses – and paperwork to support them in case of an audit. (If you file as a recreational gambler, you will not need these because you can’t claim any expense deductions.)

4.      Copies of win/loss statements from all the casinos where we have gambled in 2007. Although there are some things we hate about the trend of casino mergers, one benefit is that you can request these win/loss statements from the mother company and all the records from the children casinos will be included. These casino statements DO NOT take the place of a gaming log and are not sent with your tax return. They are merely supporting documentation in case of an audit.

Some players will have it even easier than we do since they have all their records computerized. But many of you will have it harder because you have been keeping few, if any, records at all. It is not too late to make a resolution to keep better gambling records in 2008 so tax time next year will not be so stressful.

If you have questions about how to handle your gambling numbers on your tax return, you might find Tax Help for Gamblers a helpful resource since the IRS offers surprisingly few details to guide gamblers through the tax maze. You can order it at Shop LVA.

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