SARATOGA SPRINGS — Gamblers take heart. Even losing bets at Saratoga Race Course this summer can have some value, provided you itemize your federal income tax deductions.

During the 2007 racing season, $149.6 million was wagered on horse races in Saratoga Springs, up 6 percent from 2006. From the money paid out to winners, the New York Racing Association withheld $762,022 for federal income taxes. NYRA withholds 25 percent for any winning wager or group of wagers where the odds are 300 to 1 or greater and/or the winnings exceed $5,000, minus the amount bet.

But gamblers who fall under the withholding thresholds aren’t off the hook for taxes.

The Internal Revenue Service earlier this month as part of its “Summertime Tax Tips” reminded taxpayers that all gambling winnings are fully taxable and gambling losses can be tax deductible, up to a point.

“If your luck isn’t always so good, you may deduct gambling losses,” IRS spokeswoman Dianne Besunder said. “Losses may be deducted only if you itemize deductions and only if you also have gambling winnings. But remember the losses you deduct may not be more than the gambling income you report on your return.”

Dennis Brida, a veteran horse trainer and resident of Ballston Spa, said professional gamblers keep close track of their losses for tax purposes.

“If you hit a big Pic 6 for $400,000, [NYRA] is going to take 25 percent out right there. If you want to recoup some of that you could show losses at the end of the year and recoup some of the taxes,” Brida said.

who qualifies?

Accountant Gerald DeAngelus, a partner in Slocum DeAngelus & Associates P.C., located in Latham, said any gamblers who have to sign for their winnings should be issued a W-2G tax form to use for reporting the income. He said many taxpayers will not be eligible to deduct gambling losses.

“The problem is that you deduct your losses on [form 1040] Schedule A and if you do not itemize your deductions you get no credit for your losses,” DeAngelus said.

Taxpayers may only itemize federal income tax deductions if the total of their itemized tax deductions exceeds the value of the federal government’s standard deductions.

DeAngelus said married couples filing jointly for 2008 would need to have itemized deductions of greater than $10,900 to exceed the standard deductions.

He said if a couple filing jointly had gambling winnings of greater than $10,900 and losses of equal to $10,900 the losses could enable them to itemize, but he doesn’t advise that as a tax strategy.

“Fast women and slow horses, they’ll kill you all the time,” he said.

Jim Maney, the executive director of the Albany-based New York Council on Problem Gambling, said some people addicted to gambling will use the idea of deducting losses from income taxes as a rationale for more gambling.

“A lot of them will tell people ‘oh I can deduct this from my taxes.’ It’s almost like a smokescreen to hide what’s really going on and how much they’re really losing,” Maney said. “[Tax deductions are the] rationale, but if you’re gambling that much and you’re losing that much and being preoccupied that much then obviously you’ve got something going on.”

Sometimes big gambling winners may try to fool the IRS into thinking they’ve suddenly developed a gambling problem, without a prior history of it.

DeAngelus said all gambling winnings and losses are treated the same, whether from horse racing, bingo, the lottery or a casino. He said some lottery winners have attempted to collect other gamblers’ losing horse racing tickets to use as tax offsets.

“If you’re a $1 lottery better and you hit it for $15,000 or $20,000 and you get audited because you deduct $20,000 in horse betting losses the IRS has been known to say ‘look, you’re a $1 lottery better, when did you become a $100 a race horse better?’ It just doesn’t work and there are court cases that support the IRS in that situation,” DeAngelus said.

keep records

Besunder cautioned gamblers to keep accurate records.

“Even though you may be on vacation, if you want to deduct losses when you file your return next spring, it is important to keep an accurate diary or similar record of your gambling winnings and losses right now,” she said.

Brida said most professional gamblers that he knows keep documentation for all losses.

“You better have good records and you’d better have proof of your losses. I think you’re better off doing it through account wagering like a NYRA account,” Brida said. “The NYRA account does keep track of your wagers. At the end of the year you can get a total of … how many dollars you wagered and how many dollars you earned.”

According to NYRA officials a NYRA Awards Account functions like a cash card into which a gambler places money and makes bets. The account documents the gambler’s winnings and losses.

“To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show both your winnings and losses,” Besunder said.

According to the IRS in 2005, the latest official statistics, about 1 million tax returns were filed claiming gambling loss deductions totaling $16.2 billion.