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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
line 16. You can't deduct gambling losses that as performing manual tasks, walking, speaking, the U.S. Government, or a claim made under
are more than your winnings. breathing, learning, and working, you can de- section 1862(b)(3)(A) of the Social Security Act.
You can't reduce your gambling win- duct your impairment-related work expenses. However, the amount you can deduct on
Schedule 1 (Form 1040), line 22, is limited to
Impairment-related work expenses are ordi-
! nings by your gambling losses and re- nary and necessary business expenses for at- the amount of the judgment or settlement you
CAUTION port the difference. You must report the tendant care services at your place of work and are including in income for the tax year. See
full amount of your winnings as income and Pub. 525, Taxable and Nontaxable Income, for
claim your losses (up to the amount of win- for other expenses in connection with your more information.
nings) as an itemized deduction. Therefore, place of work that are necessary for you to be
your records should show your winnings sepa- able to work.
rately from your losses. Self-employed. If you're self-employed, en- Unrecovered Investment in
Annuity
Diary of winnings and losses. You ter your impairment-related work expenses on
must keep an accurate diary or similar the appropriate form (Schedule C (Form 1040), A retiree who contributed to the cost of an an-
record of your losses and winnings. Schedule E (Form 1040), or Schedule F (Form nuity can exclude from income a part of each
RECORDS
1040)) used to report your business income and payment received as a tax-free return of the re-
Your diary should contain at least the following expenses. tiree's investment. If the retiree dies before the
information. entire investment is recovered tax free, any un-
• The date and type of your specific wager Repayments Under Claim of Right recovered investment can be deducted on the
retiree's final income tax return. See Pub. 575,
or wagering activity. If you had to repay more than $3,000 that you Pension and Annuity Income, for more informa-
• The name and address or location of the included in your income in an earlier year be- tion about the tax treatment of pensions and an-
gambling establishment. cause at the time you thought you had an unre- nuities.
• The names of other persons present with stricted right to it, you may be able to deduct the
you at the gambling establishment. amount you repaid or take a credit against your
tax. See Repayments in chapter 8 for more in-
• The amount(s) you won or lost. formation.
See Pub. 529 for more information.
Unlawful Discrimination Claims
Impairment-Related Work
Expenses You may be able to deduct, as an adjustment to
income on Schedule 1 (Form 1040), line 22, at-
If you have a physical or mental disability that torney fees and court costs for actions settled
limits your being employed, or substantially lim- or decided after October 22, 2004, involving a
its one or more of your major life activities, such claim of unlawful discrimination, a claim against

Chapter 12 Other Itemized Deductions Page 103