You might not consider yourself a gambler, but if you play the lottery or make the occasional bet at the horse track, the IRS says you are. Gambling winnings are taxable and must be reported on your tax return. That includes lotteries, raffles, races, and casino games. It includes cash as well as the fair market value of any prizes you receive- such as cars and trips.

If you’re a lucky winner, the payer may provide you with a Form W-2G, Certain Gambling Winnings. This form reports the amount of your winnings both to you and the IRS. The payer issues the form, depending on the type of game you played, the amount of winnings, and other factors. You’ll also receive a Form W-2G if the payer withholds federal income tax from your winnings. Even if you don’t receive a Form W-2G, you are still responsible for reporting your winnings to the IRS.

If you’re just a casual gambler, you should report your winnings on the “Other Income” line of your Form 1040, U.S. Individual Income Tax Return.

You may also deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings and income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference.  Keep accurate records of your gambling activity, including receipts, tickets or statements. It’s also a smart idea to keep a diary or log of your gambling activity. Your records should show your winnings separately from your losses.