From the NTRA News Desk:
As part of the fiscal cliff negotiations, members of Congress and President Obama have recently proposed capping or otherwise limiting itemized deductions in an effort to raise revenue for the U.S. government. Some horseplayers may be negatively impacted if they are unable to fully deduct pari-mutuel wagering losses as itemized deductions.
Under current tax law, winnings from pari-mutuel wagering are fully taxable and must be reported on the taxpayer’s federal tax return. For most horseplayers, losses from pari-mutuel wagering in any tax year are only deductible as a miscellaneous itemized deduction and only up to the amount of their winnings in the same tax year. This is already a very burdensome requirement for horseplayers.
Senator Bob Corker (R-TN) recently proposed a $50,000 maximum on total itemized deductions. Other proposals include limiting itemized deductions to a value of no more than a tax rate of 28 percent. Any of these proposals could be harmful to horseplayers unless all wagering losses are eligible to be deducted against winnings.
Congress has excluded gambling losses from past limitations on itemized deductions. The NTRA is working to ensure similar treatment in the current situation.