What are costs for lottery winnings?
Lottery winnings are only relevant if you have received taxable income from a lottery, a game of chance, a sports bet, or a similar gambling activity. Smaller winnings are often tax-free, depending on the type of gambling activity. As soon as a winning is taxable, it must be reported on your tax return.
When you declare a taxable win, you can also deduct a portion of it as betting expenses. This refers to costs associated with the win, such as your wagers. The deduction is a flat rate of 5% of the taxable win. For state tax in the Canton of Zurich, a maximum of CHF 5'200 can be deducted. For federal tax, the maximum deduction is CHF 5'400.
Example
You win a taxable amount in a lottery and must report this win on your tax return. You can deduct the flat-rate gambling expenses for this win.
Document
The appropriate document is usually the prize certificate or a confirmation from the organizer. If available, you can also upload proof of payment or a statement of the winnings.
How to enter it in iqtax
Go to Other Deductions > Other Deductions and click on “Add New.” Select “Costs for Lottery Winnings” and enter the details, specifically the person involved and the amount in CHF. Then upload the document as proof.
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