HRB Final Study Guide: Understanding Taxes and Adjustments, Exams of Advanced Education

Download HRB Final Study Guide: Understanding Taxes and Adjustments and more Exams Advanced Education in PDF only on Docsity! HRB FINALSTUDY GUIDE WITH 300+ Q&A EXAM What is the Difference between earned income and unearned income? - >>>Earned income is received for services performed. Examples are wages commissions, tips and generally farming and other business income . Taxable income other than that received for services performed. Unearned Income includes money received ro the investment of money or other property, such as interest, dividends, and royalties. It also includes pensions alimony, unemployment compensation and other income that is not earned If an employee thinks their Form W2 is incorrect, what should they do? - >>>Employee should discuss with employer who issued the document and request a W2C. If no help from employer, notify IRS. Tax prepaper can then file a substitute. What information do you need to know to determine whether a taxpayer is required to file a return? - >>>Gross income, filing status, age and if they are a dependent For tax purposes, when is a person's marital status determined? - >>>On the last day of the tax year Where on the tax form can you find the regular standard deduction amounts? - >>>Line 22 on 1040A, In the left margin at the top of the page 2 of forms 1040 and 1040A. Look at actual form to look for line How much is added to the standard deduction if the taxpayer (or spouse is age 65 or older, or blind? - >>>$1550 if unmarried, $1250 if married What is the personal exemption amount for 2016? - >>>$4,050 What two amounts are combined to make up the gross income filing requirments for most taxpayers? - >>>The standard deduction and the personal exemption amounts Under what circumstances might a taxpayer be required to file a return even though they do not meet the gross income filing requirements? - >>>1. Has net employment of $400 or more net self employment 2. You had unemployment income you owe medicare Advantage MSA, receive HAS, Archer, MSA 3. Reeived an Advanced Premium Tax credit even if they didn't otherwise have a filing requirment for the year *Tips, HSA, SE $400, PTC What is the difference between injured spouse allocation and innocent spouse relief? - >>>The difference between injured spouse and innocent spouse is significant in the eyes of the IRS. Both release you from an income tax liability arising from a "married filing jointly" return but different outcomes. Innocent spouse filed a joint return byt was unaware that their spouse deliberately under reported tax liability. Injured spouse seeks to protect his or her share of the refund in case it gets seized or offset due to the other spouse's debts or unpaid obligations CHAPTER 3: DEPENDENT EXEMPTIONS AND SUPPORT - >>> What four requirements must be met for an individual to be claimed as a dependent - >>>Must pass the dependent test, joint return test, citizenship, qualifying child or relative What are the five tests for a qualifying child? - >>>1. Relationship 2. Age 3. Residency 4. Support 5. Joint Return How can a married individual meet the joint return test to remain a qualifying child? - >>>They can meet this test by not filing a joint return with their spouse or they can file a joint return with their spouse if they are filing only to claim a refund on any taxes withheld How can you determine who paid more than half of a person's support? - >>>Total support is determined and reduced by the funds received by and for the person from all sources other than the taxpaer. The remaining support is considered to be provided by the taxpayer. Other sources might include government support Worksheet for Determining Support What happens if an individual is a qualifying child of more than one taxpayer? - >>>Generally, the custodial parent is the one in which the child spent the most nights What is the exception to this rule? - >>>Custodial parent may waive the right to claim dependency exemption (Form 8332) What happens when more than one taxpayer claims the same qualifying child? - >>>The IRS will apply the TIE BREAKER RULES CHAPTER 6: ITEMIZED DEDUCTIONS - >>> When is it considered advantageous for a taxpayer to itemize? - >>>When allowable expenses for things like home mortgage interest and property taxes, state income taxes or sales taxes, medical expenses, charitable contributions that exceed the standard deduction Is the deduction for medical expenses limited? - >>>You can deduct such costs only to the extent that unreimbursed expenses exceed 10% of your AGI 7.5% if 65 years old or older What types of taxes are deductible? - >>>*State and local taxes * Real Property tax * Personal Property Tax * Foreign income tax (withheld during the year) What are some common types of itemized deductions that are subject to the 2% -of-AGI floor? - >>>Tax preperation fees- Unreimbursed ordinary and necessay employment expenses, gambling losses to the extent of winnings, hobby losses to extent of hobby income, tax advice and preperation fees, investment expenses What are some miscellaneous itemized deductions that are not subject to the 2%-of-AGI limitation? - >>>Gambling losses, impairment related expenses for handicap, decedents remaining basis, federal estate tax in respect of a decedent A taxpayer wrote a check for a $500 donation to their mosque. Is their canceled check sufficient documentation to support the deduction? - >>>No, the gift exceeded $249 must obtain written substantation from the donee organization CHAPTER 11: EITC AND ACTC - >>> Who may qualify for the Additional Child Tax Credit? - >>>Must qualify for the Child Tax Credit and has one of the following: Earned Income exceeding $3000, 3 or more qualifying children whose child tax credit was limited What is the second due diligence requirements for the EITC, CTC/ACTC and AOTC and how does a paid preparer meet this requirement for EITC and CTC/ACTC? - >>>Requirement 2 - The second due diligence requirements for ACTC is to complete and keep all worksheets for ACTC the credit is calculated using Schedule 8812 for CTC a worksheet must be completed and kept If a taxpayer has no qualifying children, what are the four qualifications they must meet to receive the Earned Income Tax Credit? - >>>1. Must be at least 25 years old but younger than 65 on Dec 31, 2016 (If married filing jointly either spouse can meet this requirement) 2. Must not be able to be claimed as a dependent on another taxpayers return 3. Must not be a qualifying child of another person 4. Must live in the United States more than 1/2 the year 5. Must have earned income and AGI of less than $14,880 ($20,430 if MFJ) If a taxpayer has one or more qualifying children, what the four specific qualifcations they must meet to receive the Earned Income Tax Credit? - >>>(11.12) 1. Have qualifying child who meets the relationship, age, residency and joint return tests 2. Have a qualifying child who is not claimed by another EITC 3. Not be qualifying child of another person 4. Have earned income and AGI less than one of the following: *$39,296 ($44,846 if MFJ) *$44,648 ($50,198 if MFJ) with two qualifying children *$47,955 ($53,606 if MFJ) with three or more children What are the six qualifications that must be met for any taxpayers to be eligible to claim the Earned Income Tax Credit? - >>>1. Have a valid SSN 2. Not use the filing status MFS 3. Be a US citizen or resident alien all year 4. Not file a Form 2555, Foreign Earned Income or Form 2555EZ Foreign Income Exclusion 5. Have investment income of $3400 or less 6. Have Earned Income of at least $1 Chris (26) has an earned income and AGI of $9,486. He has no other income. He lived in the United States all year and is not one's dependent. He has a valid SSN and is filing as single. He is a US citizen. Does Chris qualify for EITC? - >>>Yes What is the third due diligence requirement for the EITC, CTC/ACTC, and AOTC, and how does a paid preparer meet this requirement for EITC and CTC/ACTC? - >>>Knowledge Requirement: Tax preparer cannot know of or have any reason to know that any information used to determine taxpayers eligibility for, or the amount of , the credit is incorrect or inconsistent. Tax Preparers must complete the smell test (Retain notes and ask open end questions) Is unemployment compensation taxable? - >>>Yes Are scholarships and fellowships taxable? - >>>If the student is a non degree candidate or is not attending an eligible educational institution then the scholarship or fellowship are fully taxable What documents will the taxpayer receive from their employer reproting disability pension payments? - >>>1099R Where is income from disability pension payments entered on Form 1040 A? - >>>1040 A line 7 Note: once the taxpayer reaches minimum retirement age, pension income is reported on Form 1040A lines 12a and 12b..it could go on line 12a or b if retired Under what circumstances can a d disability pension qualify as earned income for the EITC - >>>Before the taxpayer reaches minimum retirement age, income is treated as wage income and is considered earned income for EITC purposes What types of income must be reported on Form 1040 and cannot be reported on Form 1040a? - >>>Gambling winnings, Alimony, Prizes and Awards, jury duty, hobby income (compare 1040 and 1040A if you need help figuring it out CHAPTER 14: ADJUSTMENTS - >>> What are the four adjustments that can be claimed on Form 1040A - >>>Educator Expenses, IRA Deduction, Student Loan Interest Deduction, Tuition and Fees Deduction What is it called if a taxpayer take smoney of one IRA and puts into another IRA (and all requirements are met)? - >>>rollover Who is eligible to to establish a traditional IRA? - >>>Any taxpayer who has not reached age 70 1/2 at the end of the year and who has received compensation during the tax year. This includes self employed taxpayers What is the IrA contribution limit for 2016? - >>>$5500 - $6500 if taxpayer has reached age 50 by the end of the year or 100% of taxpayer compensation What is the last date on which an IRA contribution may be made and qualify as a contribution for a given year? - >>>(18.9) An IRA may be established and contributed to until the due date (not including extensions) of the return for the year on or before April 18, 2017 Why is it important to distinguish between taxpyers who are active participants in an employer maintained retirement plan and those who are not? - >>>Those who are not active and whose spouses are not active may deduct the full amount they contribute to a traditional IRA assuming they stay within the contribution limits. Those are who are active participants or whose spouses are active participants may still contribute within the limits but may find their allowable deduction reduced or eliminated What are the main differences between traditional IRAs and Roth IRAs? - >>>contributions to a Roth are never deductible, but qualified distributions are exempt from tax. Participation in an employer- maintained retirement plan has no effect on Roth IRA contributions and contributions can be made after taxpayer has reached 70 1/2. Contributions to Roth IRA are not reported on the tax return as long as you have income CHAPTER 19: ETHICS - >>> What is a thorough interview? - >>>(19.3) A thorough interview consists of asking questions whenever information is incomplete or seems inaccurate or inconsistent What is a conflict of interest? - >>>(19.5) A situation where one client will be adversley affected by representation of another client Circ 230 Sect 10.29 What actions can resolve a conflict of interest? - >>>(19.6) When a conflict of interest acknowledged, a tax preparer may still represent the clients under the following circumstances 1. The tax preparer reasonably believes they can provide competent and diligent representation to each affected client 2. The representation is not prohibited by law 3. Each affected client gives informed consent, confirmed in writing, stating that they waive the conflict. IRS requires conflict of interest waivers from client and keep for 36 months What taxpayer information is confidential? - >>>All types of tax returns * tax information forms * Declaration of estimated tax * supporting schedules *Taxpayer identity *The nature source and amount of income *Payments, receipts, deductions, exemptions, credits ...everything Is it acceptable for a Tax Professional to leave a deailed phone message for a taxpayer, letting them know their return is complete? - >>>*Tax professionals must have prior consent from the client to leave phone messages related to their tax return *The that a taxpayer is a client of a Tax Professinal or tax preparation business is confidential information that must not be disclosed What is a Tax Professional's responsibility upon finding out that taxpayer has not complied with one or more tax laws? - >>>Practitioner must advise the client of the consequences as provided under the code and regulations of such non compliance error or omission What actions should a Tax Professional take if a taxpayer insists on reporting information that is inaccuracte? - >>>A tax preparer should never prepare a return that contains inaccurate information On what form are social security benefits reported to the recipient? - >>>(18.21) Form SSA-1099 What form is used to report the taxpayer's retirement account distributions? - >>>(18.26) Form 1099R Under what circumstances would a pension be partly taxable? - >>>(18.25) A partially taxable distribution is a distribution in which a taxpayer has made after tax contributions to the retirement account What traditional IRA distributions are fully taxable? - >>>(18.3) If taxpayer made only deductible contributions. Use form 8606 Quizlet: Those to which the taxpayer made no nondeductible contributions (all contributions were fully deductible) When would traditional IRA distribution be partly taxable? - >>>When the taxpayer has made nondeductible contributions Where is income tax withheld from a retirement account or IRA distribuin reported on the Form 1040A tax return - >>>1040A line 40 1040 Line 64 (check actual form) What is the maximum amount of contributions on which the Saver's Credit may be based? - >>>(18.18) up to $2000 $1000 for individuals What are the percentage rates for the Saver's Credit? - >>>(Table on 18.19) Credit rates are 10%, 20%, or 50% depending on filing status and MAGI Are early distributions from qualified retirement plans always penalized? - >>>(18.35) no, There are several exceptions to the penalty. Fill out form for exception form 5329 How does a Tax Professional know if an exception applies? - >>>If an exception applies, a code is entered in form 5329 line 2 - Thorough interview, questions or could be code on 1099R Exceptions are on 18.35 - >>> Earnings on the contributions are also tax-deferred." - >>> What is an EMPLOYER RELATED major benefit of many 401(k) plans? - >>>"An employer may choose to match all or part of the employee's contribution to the account (this may be done by matching contributions or by - >>> offering a profit-sharing contribution to the plan)." - >>> What is a 403(b) plan? - >>>"A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers, and cooperative - >>> hospital service organizations. (Often called Teacher Plans)" - >>> What is a 457 plan? - >>>"A 457 plan is a tax-advantaged, deferred-compensation retirement plan available primarily for governmental employees." - >>> What are the features of 403(b) and 457 plans? - >>>"403(b) and 457 plans are essentially identical to 401(k) plans. All allow tax-deferred contributions and earnings. All - >>> are a valuable tool to help save for retirement." - >>> What is the 2016 contribution limit to 401(k) plans? - >>>"The maximum contribution for 2016 is $18,000. Taxpayers age 50 and above are allowed a $6,000 annual ""catch-up"" contribution." - >>> "What are the key differences between a traditional 401(k) or - >>> 403(b) and Roth 401(k) or 403(b)?" - >>>"Contributions to Roth accounts are not tax-deferred. Distributions from Roth accounts are tax-free when taken." - >>> What does IRA stand for? - >>>Individual retirement arrangement (or account). What is compensation for IRA purposes? - >>>"Compensation is wages, salaries, tips, commissions, professional fees, bonuses, net self-employment income (minus any amounts on Form 1040, - >>> lines 27 and 28), and other amounts the taxpayer receives for providing - >>> personal services. Alimony and separate maintenance payments received - >>> also count as compensation for this purpose." - >>> "What effect does a net loss from self-employment have on total - >>> compensation?" - >>>"None. A net loss from self-employment does not reduce other compensation for IRA purposes." - >>> What are the advantages of a traditional IRA? - >>>"Contributions may be deductible from gross income. Earnings are not taxed until withdrawn. Distributions from the fund after the individual - >>> retires are generally taxable, but often at a lower rate because taxable - >>> income is usually lower during retirement years. Any nondeductible contributions - >>> can be recovered tax-free" - >>> Who is eligible to establish a traditional IRA? - >>>"Any taxpayer who has not reached age 70½ at the end of the year and who has received compensation during the tax year. This includes selfemployed - >>> taxpayers" - >>> "What is the last date on which a contribution may be made and - >>> qualify as a contribution for a given year?" - >>>The due date (not including extensions) of the return for that year How is modified AGI determined for traditional IRA purposes? - >>>"By adding back any student loan interest deduction, tuition and fees deduction, excludible U.S. Savings Bond interest, excludible adoption benefits, - >>> domestic production activities adjustment, and certain excludible - >>> foreign and U.S. possession income. - >>> " - >>> "What are the main differences between traditional IRAs and Roth - >>> IRAs?" - >>>"Contributions to a Roth IRA are never deductible, but qualified distributions are exempt from tax. Participation in an employer-maintained - >>> retirement plan has no effect on Roth IRA contributions, and contributions - >>> can be made after the taxpayer has reached age 70½. Contributions - >>> to Roth IRAs are not reported on the tax return." - >>> "Under what circumstances would a taxpayer's Roth IRA contributions - >>> be limited?" - >>>"When the taxpayer's filing status is married filing separately and lived with their spouse at any time during the year, or their modified AGI - >>> exceeds $117,000 (S, HH, or MFS and lived apart the entire year) or - >>> $184,000 (MFJ or QW)." - >>> How is modified AGI computed for Roth IRA purposes? - >>>"The same as it is for traditional IRA purposes, except that any amount arising from the conversion of a traditional IRA to a Roth IRA is subtracted." - >>> "A single taxpayer has AGI of $80,000. He is an active participant - >>> in an employer-maintained pension plan. Why should he choose - >>> to contribute to a Roth IRA rather than a traditional IRA?" - >>>"His contribution to a traditional IRA would not be deductible. While the same is true of Roth IRA contributions, qualifying distributions from his - >>> Roth IRA would not be subject to tax at all. Distributions from a traditional - >>> IRA containing nondeductible contributions would be partly taxable." - >>> "Which taxpayers are not entitled to claim a retirement savings - >>> contribution credit (the Saver's Credit)?" - >>>"Taxpayers who were: • Born after January 1, 1999. - >>> • Claimed as a dependent on someone else's 2016 return. - >>> • Full-time students during any part of five-calendar months in 2013" - >>> Which contributions qualify for the Saver's Credit? - >>>"Contributions to traditional and Roth IRAs and voluntary salary deferrals to most employer plans." - >>> "What types of distributions will reduce the amount eligible for the - >>> Saver's Credit?" - >>>"Distributions from the same types of plans made in the two tax years prior to the current year up to the due date of the current year's return (including - >>> extensions)." - >>> "What is the maximum amount of contributions on which the - >>> What amounts does a proprietor have "at risk"? - >>>Amounts invested in the business plus any business debts for which the proprietor is personally liable. What difference does it make if the proprietor is "at risk" or not? - >>>Only amounts at risk may be used to determine the actual loss on Schedule C. How does a Tax Professional meet due diligence requirements? - >>>"• Tax Professionals fulfill due diligence requirements by making every effort to prepare accurate and complete returns. • Tax Professionals must have knowledge of tax law, and apply a reasonability check to the information provided by their clients." - >>> Is there a time limit for filing amended returns? - >>>"Yes. Three years from the date the return was filed or within two years the tax was paid, whichever is later." - >>> What are the rules for changing filing status after the due date of the return? - >>>Married couples may not change their filing status from MFJ to MFS after the due date A taxpayer's employer paid $500 of a taxpayer's $2,000 child care expenses for him. How will the employer's assistance affect the child-care credit? - >>>Total child care expenses must be reduced by any amounts paid by the employer. Where does the employer report the amount of child care expense assistance to the taxpayer? - >>>Form W-2 Box 10 A taxpayer is building a new home and had a solar water heater installed in 2015, but the home was not ready to be occupied until early 2016. Can they take the residential energy credit? - >>>Yes, they can take the credit on their 2016 tax return. How much may an eligible educator deduct for qualified classroom expenses as an adjustment to income? - >>>Up to $250 Who is an eligible educator? - >>>Works at least 900 hours a year. Where is the educator expense deduction reported? - >>>1040 line 23 , 1040A line 16 What is a qualified student loan? - >>>"• Any type of loan used to pay qualified expenses. Credit card debt may be included, provided the card was used exclusively to pay for qualified expenses. • Money borrowed from a related person is not a qualified student loan." - >>> Where are moving expenses deducted on Form 1040? - >>>Line 26, from Form 3903 What are qualified medical expenses with regards to an HSA? - >>>Unreimbursed medical expenses that would normally be deductible on Schedule A What form is used to report HSA contributions and determine any allowable deduction? - >>>Form 8889. Reported on Form 1040 Line 25. Under what circumstances do you need to determine whether a taxpayer paid over half of the cost of maintaining his home? - >>>f you are determining if the taxpayer may be considered unmarried, a qualifying widow(er), or head of household What are some of the costs of maintaining a home? - >>>" Rent What requirements must be met for a taxpayer to use the qualifying widow(er) status? - >>>The death of the taxpayer's spouse must have occurred during one of the two preceding tax years; The taxpayer must not have remarried and must have been entitled to file a joint return for the year of death The taxpayer must have paid over half the cost of maintaining the home which, for the entire year, was the main home of their dependent son, daughter, stepson, or stepdaughter." In general, which parent gets to claim the qualifying child in a divorce? - >>>The custodial parent What is the exception to the custodial parent qualifying child rule? - >>>"• If a decree of divorce or separate maintenance or written separation agreement that became effective after October 4, 2004, states that the noncustodial parent is entitled to claim the child's dependency exemption, or if the custodial parent executes a written declaration that they will not claim the child as a dependent for that year, the noncustodial parent may claim the qualifying child. For divorces granted after December 31, 2016, Form 8332 must be filed if parents are separating tax benefits. " What's the difference between a withholding allowance and an exemption? - >>>"• A withholding allowance is reported on Form W-4 and is used to accurately calculate the amount of tax to be withheld from an employee's wages. • An exemption is claimed on the tax return for the taxpayer, spouse, and each dependent. Under what circumstances may an employee claim exemption from withholding? - >>>Only if the employee had no federal income tax liability for the prior year and he expects to have no tax liability for the current year. What information do you need to know to determine whether a return is required? - >>>"• Marital Status Age & Student Status Gross Income • Over 65 and Blindness Dependent Status" What two amounts combine to make up the gross income filing requirement for most taxpayers? - >>>The Standard Deduction and the Personal Exemption amounts. • Casualty and theft losses from income-producing property - >>> • Amortizable bond premiums" - >>> At what amount must interest income be reported on Form 1040, Schedule B - >>>When the total taxable interest exceeds $1,500 Is interest received on U.S. Treasury Obligations taxable on state and /or local returns? - >>>No. Interest on U.S. Treasury Obligations is exempt from state and local tax by federal law. What types of taxpayers will require the Qualified Dividends and Capital Gain Tax Worksheet - Line 44? - >>>" Taxpayers who receive Form 1099-DIV showing that they received qualified dividends must use the Qualified Dividend and Capital Gain Tax Worksheet—Line 44. Also, those taxpayers who have capital gain distributions shown in box 2a of Form 1099-DIV will use the worksheet." What form is used to request a six-month extension to file? - >>>Form 4868 Application for Automatic Extension of Time to File US Individual Income Tax Return If a taxpayer is anxious to e-file their return in January, can they do so without Form W-2, as long as they have their last paystub? - >>>" No, they must wait until February 15. • The IRS will not accept returns with substitute W-2s prior to February 15. (" What qualifies as long term? - >>>More than one year. Define basis. - >>>A measure of the taxpayer's investment in property for tax purposes What is the basis of purchased property? - >>>Cash paid plus the fair market value of services rendered plus the fair market value of property traded. Certain closing costs are added to the basis What is the maximum net capital loss that a taxpayer may deduct in one year? - >>>$3,000 ($1,500 MFS) What effect do tax-free funds (such as grants) have on qualifying expenses for the AOTC? - >>>Expenses must be reduced by those amounts. What is the maximum lifetime learning credit? - >>>$2,000, annually per return How is the lifetime learning credit calculated? - >>>20% of the first $10,000 of qualifying expenses per return, per year. What is the maximum tuition and fees deduction? - >>>$4,000 for taxpayers with modified AGIs up to $65,000 ($130,000 MFJ), or $2,000 for taxpayers with modified AGIs between $65,001 and $80,000 ($130,001 and $160,000 MFJ). How can a married individual meet the joint return test to remain a qualifying child? - >>>They can meet this test by not filing a joint return with their spouse, or they can file a joint return with their spouse if they are filing only to claim a refund of any taxes withheld. What is the purpose of the alternative minimum tax (AMT)? - >>>The purpose of the alternative minimum tax is to make sure that taxpayers with higher incomes cannot entirely avoid taxes through the use of certain deductions and credits. In what way is a clergy member's compensation treated differently from compensation of other employees? - >>>Compensation of clergy members is subject to self-employment tax instead of social security and medicare tax withholding. Under what circumstances are tips not subject to social security and medicare taxes? - >>>Tips totaling less than $20 in a calendar month are not subject to these taxes. Also, if the taxpayer has already paid the maximum social security tax for the year, further tips are not subject to social security tax. Under what circumstances is Form 4137 prepared? - >>>Only if the taxpayer did not report tips to his employer as required, or if he is reporting allocated tips. What form is used to report household employment taxes? - >>>Schedule H, Household Employment Taxes is filed to report household employment taxes paid. The calculated amount is then carried to Form 1040, line 59. What happens if an individual is a qualifying child for more than one taxpayer? - >>>The taxpayers may decide among themselves who will claim the credit. How does one determine the taxable income of the taxpayers who itemize deductions? - >>>Adjusted gross income (AGI) minus total itemized deductions and total exemptions. ( Why is it important to distinguish qualified home mortgage interest from personal interest? - >>>Mortgage Interest is deductible, Personal Interest is not. Is the cost of items purchased to benefit a charitable organization deductible, for example, ballet tickets to raise money for a non-profit hospital? - >>>Only the amount paid in excess of the value of the item is deductible. Are scholarships and fellowships taxable? - >>>"• If a W-2 is received it is FULLY taxable. • Amounts to Non-degree candidates are FULLY taxable and reported on Line 7 marked ""SCH"" • Amounts to Degree candidates spent for qualified expenses are NOT taxable. " Under what circumstances are gross gambling winnings taxable? - >>>Always. Gambling losses may be deductible up to the amount of winnings.