Maximizing 401(k) contributions, charitable donations, and selling underperforming investments are all ways to reduce your taxable income before the end of the year. Another option is to put money aside in a health savings account (HSA) or traditional IRA. You have until December 31st to make these moves, reducing your taxable income for the calendar year.
Experiencing a big win, whether in a casino, poker tournament, or through some other gambling venture, can feel great. It is important to know that the money that you earn through gambling is taxed by the IRS. By planning accordingly, you can be sure you won’t have any costly surprises at the end of the year. Gambling winnings are considered taxable income in most states, whether this is paid by cash, check, or electronically. This should be accounted for in the income reported for in the year that the money was won, paying the appropriate taxes on this windfall.