David wrote, in a very thorough letter on the tax implications of
gambling winnings:
"Note that the IRS allows taxpayer who are professional gamblers
to treat the gambling income on a Schedule C (trade/business income),
netting the gambling income and expense as part of adjusted gross
income**. However someone with employment income is generally not
eligible for such treatment. "
Schedule C is for self-employment income. All of my income goes
on Schedule C. I've never had to worry about how to handle gambling
winnings over $ 1,200 because the situation has not been my fortune, but
I have lots of experience with Schedule Cs. Unless there are some
special rules applying to professional gamblers, anyone can use Schedule
C. You can even fill out multiple Schedule Cs for different income
sources. For example, someone who has income from writing, photography
and gambling can use three different Schedule Cs.
Also, there are lots of folks who have both W-2 and 1099 income
and have no problem indicating both salaried income (on Form 1040) and
self-employment income (on Schedule C.).
Elliot