Gambling losses can zero out your gambling winnings, but they can’t reduce other income. 4 standard deduction) If you netted winnings of $2,000 you’d have $39. Winnings are reported as "other income" on Schedule 1. If you don’t take advantage of excess itemized deductions,. Michigan has a new individual income tax deduction for wagering losses sustained by casual gamblers, effective for tax years beginning in 2021. The standard deduction is a flat amount based on your filing status (single; married filing separately; married filing. You cannot use gambling losses to create or increase a tax loss. Ask your own question now. Casual Gamblers: Casual gamblers, who gamble for leisure and don’t earn a living from it, can deduct gambling losses as a miscellaneous itemized deduction on Schedule A (Form 1040), subject to the limitation that losses can only be deducted up to the amount of winnings reported. Gambling losses are not deductible unless you have gambling winnings. For federal purposes, you can no longer claim an itemized deduction for a casualty or theft loss unless it is the result of a federally declared disaster. In 2021 the standard deduction for filing single is $$12,550 and married filing jointly is. You are permitted to deduct gambling losses if you itemize your deductions. If you want to offset your winnings with your losses, you must itemize on your tax return. You can only deduct gambling losses up to the amount of your winnings if you itemize deductions on Schedule A. You can deduct gambling losses if you itemize your deductions on your tax return, but you cannot deduct more than the gambling income you received. Finally, if you. Here’s an example: You wagered $3,000 on sports betting and won. You won't be able to deduct. nakor28 • 3 yr. In deluxe version when I claim the loss amount As the same amount as the win it does not change my refund amount back to where it was before. $5,000 or more from a poker tournament,. However, effective for tax years beginning January 1, 2021, c asual gamblers may deduct wagering losses claimed by the taxpayer as an itemized deduction on the federal income tax return for the same tax year. 5% of your income to be greater than the standard deduction. The full amount of winnings must be reported as income, and the losses can be claimed as an an itemized deduction up to the amount of the winnings. Therefore, if you don’t itemize and take the standard deduction, you can’t deduct gambling losses. 2021 - $3,000 loss. You can claim an "above-the-line" deduction on Schedule 1. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. If you are able to itemize your deductions, gambling losses can be. In order to obtain a deduction for your lottery losses, you should have the following three pieces information:Feb. You must report the full amount of your winnings as income and claim your allowable losses If you do not itemize , there is nothing you can doYou cannot adjust the w-2 by the losses. In short: The only reason to actually deduct gambling losses would be if they — along with other deductions — are more than the standard. Itemized Deductions: Gambling losses are considered itemized deductions rather than above-the-line deductions. Changes Under the Tax Cuts and Jobs Act There is a threshold requirement for the gambling losses deduction, which means that you can only deduct losses that exceed 2% of your adjusted gross income (AGI). One of them is you cannot claim losses greater than winnings. Gambling losses are not a one-for-one reduction. While you can write off some gambling losses if you itemize, that deduction can’t exceed the amount of your winnings. If you do not itemize , there is nothing you can doYou cannot adjust the w-2 by the losses. For your 2022 taxes, which you will file by April 18, 2023, teachers, counselors and principals who aren’t reimbursed for buying supplies can deduct up to $250. LISA GREENE-LEWIS: Right. For tax years prior to 2018 and after 2025, you can only deduct casualty losses not reimbursed or reimbursable by insurance or. Conversely, you may only deduct gambling losses if you itemize your deductions on Schedule A of Form 1040. In other words, you can’t claim more in losses than you have in winnings, and you cannot claim the standard deduction. You don’t have to fill out a W-2G form in the casino for specific sums. When you win, the gambling establishment may issue you a Form W-2G if the winnings meet certain thresholds. Keep in mind that you can only offset gambling losses against the tax you pay on gambling wins. It may not seem very easy, but Bounds Accounting will lead you through the process from start to finish. On the flip side, for those who itemize their tax deductions, the IRS also allows people to deduct gambling losses. 6k taxable income. Topic No. Gambling. An amateur player, or someone who plays poker casually, can only use their losses for tax deductions if they report all of them as itemized deductions. Do you have to itemize deductions to claim gambling losses? Yes, gambling losses are only deductible as an itemized deduction on Schedule A. Gambling winnings are unique because you can also deduct your gambling losses and certain other expenses, but only in specific circumstances (see our article about this). Assuming you file jointly with your wife, the federal tax would only be 24% if your joint taxable. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. You can still claim certain expenses as itemized deductions on Schedule A (Form 1040), Schedule A (1040-NR), or as an adjustment to income on Form 1040 or 1040-SR. S. Losses on line 16 cannot be greater than wins on line 8. You may deduct gambling losses only if you itemize your deductions and kept a record of your winnings and losses. However, there is a bit more that you have to do throughout the year in order to make that happen. Michigan gaming but also would allow them to deduct losses attributable to gaming that did not occur in Michigan. (Getty Images) While you don't. S. Gambling losses are not deductible unless you have gambling winnings. You may be asked to back up your claims. In addition, you won't be able to write off gambling losses unless you itemize your deductions . Itemizing your deductions might benefit you if the amount. The deduction can only be claimed if you choose to file. Claim your gambling losses up to the amount of winnings, as "Other Itemized. In 2023, that range is up to $13,850 to $27,700. This can limit some taxpayers’ other deductions, including medical and miscellaneous itemized deductions. Additionally, winnings and losses must be reported separately, i. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. • To report your gambling losses, you must itemize your income tax deductions on Schedule A . If you gamble at other times. Casual gamblers also must keep records of their gambling. There is one golden rule to keep in mind when deducting gambling losses on your tax return. If you itemize instead of taking the standard deduction, you can deduct gambling losses up to the amount of your winnings. Your gambling losses up to the amount of your winnings ($11K) can be deducted as an itemized deduction on Schedule A. For example, if you spent $1000 at the casino but only won $200, you'll only be able to claim a gambling loss of $200. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. ” You cannot reduce your gambling winnings by your gambling losses and report the difference. Tickets. But the itemized losses (which I’ve kept good electronic and diary record of) will offset ALL winnings. The tool is designed for taxpayers who were U. The gaming establishment is required to issue you a W-2G form whenever you win above certain amounts. You can't deduct more in gambling losses than you have in gambling winnings for the year. Gambling winnings are reported on Form 1040 Schedule 1 on Line 8 as Other Income. If you itemize, you can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under ”Other Miscellaneous Deductions. tax code is very broad in how it defines what is taxable. Practically, IRS auditors may allow some reconstruction of these expenses if. Therefore, if you don’t itemize and take the standard deduction, you can’t deduct gambling losses. Your gambling loss deduction cannot be more than the amount of gambling winnings. Thanks to a bill signed in 2021, you can deduct losses equal to your winnings. you would have to report all $10K of gambling winnings in your income, whether to itemize with the offsetting losses or take the standard deduction is up to your specific tax situation. Gambling Losses Tax. So you can use losses to “wipe out” gambling income but you can’t show a gambling tax. Even if your winnings don’t exceed those amounts and you don’t receive a W-2G, you’re still technically required to report your winnings to the IRS. You can’t deduct gambling losses if you take the standard deduction. 5: This first Sunday of. Winnings from gambling can be taxable and should be reported on your tax return. Sports betting losses might also be used as deductions if you itemize your deductions and keep a detailed record of wins and losses. If you’re in the red for the year, don’t expect to recoup those losses with tax deductions. You. The key is you can’t deduct losses that amount to more than what you’ve won. 2020 - $3,000 loss. Gambling winnings ($500) cannot be reduced by gambling losses ($400), and only the difference ($100) is reported as income. In other words, you can’t claim more in losses than you have in winnings, and you cannot claim the standard deduction. However, your gambling loss deduction shouldn’t exceed your winnings. You can claim your gambling losses as “Other Itemized Deductions” on your income tax. What do you need to deduct. In short: The only reason to actually deduct gambling losses would be if they — along with other deductions — are more than the standard deduction. Professional gamblers don’t have to itemize to claim losses—those also can go into a Schedule C. Are gambling losses deductible? Gambling losses up to the amount of gambling winnings may be deductible if you itemize. This limitation applies to the combined results from any and all types of. You can still deduct gambling losses while claiming the standard tax deduction. Furthermore, you cannot offset your. So, if you made $10,000 on gambling last year but lost $12,000, you can only deduct $10,000 in losses (nothing more). Form 1040 Schedule A. You must itemize all your deductions to deduct your gambling losses on your tax return. So, Congress has created laws to discourage you from gambling. If you report winnings of $2,000 and your losses were $4,000 you can only deduct $2,000 in losses. Gifts to individuals are not deductible. Such receipts also come in handy if you itemize tax deductions and can deduct your gambling losses. In the U. You report gambling winnings as “other income: gambling income” on Form 1040, Schedule 1, Schedule 1, line 8b. Your. For example, if you have $5,000 in winnings but $8,000. I keep reading about itemize deductions are required however when I change to itemized my refund is even less. Gambling Losses. While the IRS does not have a gambling losses tax, it does allow for you to deduct gambling losses on your tax return in the form of a miscellaneous deduction. If you itemize your deductions on Schedule A, then you can also deduct gambling losses but only up to the amount of the winnings shown on your tax return. Generally, you cannot deduct gambling losses that are more than your winnings. If you do not itemize, you may elect to take the standard deduction of $2,690. When it comes to deducting gambling losses, they are limited to the amount that is won while gambling. Level 15. Not exactly. Form 1040 Schedule 1 and U. Claim your gambling losses up to the amount of winnings, such as Other Itemized Deductions. The Tax Court held that Coleman had substantiated that his gambling losses for 2014 were in excess of his gambling winnings, so he was entitled to the $350,241 gambling loss deduction. Educator Expenses. That’s because the IRS allows you to deduct gambling losses. You show the income,. If they’re married to another educator and they’re filing jointly, the limit rises to $500. This final category of itemized deductions includes items such as gambling losses to the extent of gambling winnings, losses from partnerships or subchapter S corporations, estate taxes on income. The additional losses are not deductible. Tip: For tax years 2020 and 2021 only: Even if you don't itemize deductions, you can still deduct up to $300 of cash charitable contributions on your 2020 tax return (the one you'll file in 2021). Amateur gamblers who don’t itemize can’t claim gambling loss deductions. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040)and kept a record of your winnings and losses. You can either claim the standard deduction or itemized deductions on your return — but not both. Gambling Losses are reported on Form 1040 Schedule A as a Miscellaneous itemized deduction. You can claim your gambling losses as "Other Itemized Deductions. However, for a casualty loss that is the result of certain federally declared disasters (Form IT-196, line. SHE OWES AT LEAST 25%. You can’t deduct more than you won, even if you did actually lose more than you won during the course of the year. Gambling Losses and Itemized Deductions I have about $20,000 in gambling winnings with the same in losses. Before the law, professional. As a result, you can't claim a deduction exceeding the amount of gambling income. So, the. It simply disappears. Note that if you don't itemize, you can't deduct your gambling losses: If you had $5000 in winning sessions and $6000 in losing sessions, you have to report the $5000 as income, and you can't subtract out your losses, because you're not itemizing. In addition, you won’t be able to write off gambling losses unless you itemize your deductions. If you don’t report, you may get hit with higher withholding levels on the Federal level. If you used your players card, you. For federal purposes, you can no longer claim an itemized deduction for job expenses and certain miscellaneous deductions that were subject to the 2 percent of FAGI limitation. If you don 't have access to all. For the most part, an individual may claim those deductions allowable as itemized deductions under the Internal Revenue Code. It is very hard now to get to deduct losses. So you can use losses to “wipe out” gambling income but you can’t show a gambling tax loss. Gambling winnings must be reported as income, but gambling losses are deductible only as an itemized deduction. For 2021, the standard deduction numbers to beat are: Single taxpayers: $12,550. TurboTax keeps. Instead, you must report your gambling income and gambling expenses separately. ). Gambling Losses You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040 or 1040-SR) PDF and kept a record of your winnings and losses. This means that to claim them, you must choose to itemize your. Gambling losses are an itemized deduction. What if you don’t have enough deductions to itemize? Tough luck! Maybe. Second, if you itemize deductions onyour tax return, you can deduct your gambling losses against your winnings. If you claim the standard deduction, y ou don’t get the opportunity to reduce taxes for winnings owed by deducting gambling losses. The only golden rule is that the gambling losses to be deducted cannot exceed the winnings reflected as gambling income. Example: John wins $23,500 during the year playing slots and other casino games. You can only itemize your losses up to $10,000 on your tax returns. 504 to figure the portion of joint expenses that you can claim as itemiz-ed deductions. If you itemize deductions , you may claim gambling losses up to your gambling winnings. You may only deduct gambling losses, to the extent of gambling winnings. If you itemize deductions, you can deduct your gambling losses for the year on line 27, Schedule A (Form 1040). You can only itemize your losses up to $10,000 on your tax returns. You don't report your gambling income net of expenses, though. You. If you claim the standard deduction, the gambling losses are considered to be part of that amount. They do not offset. so your balance is $100 after those bets. In other words, you cannot claim losses that exceed your total winnings. DoNotPay provides you with the fastest, easiest, and most reliable way to file your gambling losses taxes. This limitation applies to the combined results from any and all types of. To maximize your deductions, you'll have to have expenses in the following IRS-approved categories: Your expenses in certain categories must cross various thresholds in order to itemize. You can deduct gambling losses up to the amount of gambling winnings, but only if you are able to itemize your. However, for a casualty loss that is the result of certain federally declared disasters (Form IT-196, line. Footnote 7 Gamblers can deduct their gross losses but only if they are itemizing deductions and these losses can only be used to offset gross winnings. To calculate your gambling losses, you should keep accurate records of your wins. And no, you don't need to itemize either (Schedule A). Report all gambling winnings. Itemized Tax Deductions. The 2017 tax law, known as the Tax Cuts and Jobs Act, also modified the definition of “gambling losses” under Section 165(d). In that scenario, you would be taxed on the $11K. Your gambling loss deduction cannot be more than the amount of gambling winnings. Therefore, if you lost $3,000 gambling, and won $1,000 of it back, only $1,000 can be deducted as a. Yes - gambling losses are deducted as a part of itemised deduction - on schedule A. To deduct your losses from gambling, you will need to: Claim your gambling losses on Form 1040, Schedule A as Other Miscellaneous Deduction (line 28) that is not subject to the 2% limit. Gambling losses go on schedule A line 28 and are not subject to the 2% threshold. You can't use it to offset your gambling gains in other years. If you don't itemize, you can't deduct the losses. Losses are reported on the Schedule A (Form 1040), Itemized Deductions. However, for a casualty loss that is the result of certain federally declared disasters (Form IT-196, line. Many don’t keep records and player’s club cards often don’t get all the. But if you have paperwork to support it, go for it. Here are five bad days — and ways that tax experts say you could turn them into a smaller tax bill. ONLY about 25% of the population itemizes! Chances are if granny hits a $2,000 jackpot. Say you've got a W2G of $4k which you report on your taxes. NOTE:. Know what you can and can't claim to maximize your potential tax savings. Your losses can't exceed your winnings, though. The Tax Cuts and Jobs Act of 2017 eliminated most miscellaneous itemized deductions allowable that are over 2% of adjusted gross income (AGI) in. If you break even over the course of a year, you won’t have to pay taxes on winnings because your losses offset taxable winnings. Residents: report the amount of wagering losses you. 6k (50 - 12. Itemize only. gov. With $10,000 in winnings, you can deduct combined losses up to that amount. Third, there’s no need to itemize your deductions. Limitations on loss deductions The amount of gambling losses you can deduct can never exceed the winnings you report as income. Charitable Cash Contributions, Even If You Don’t Itemize. If you plan to deduct your losses, you must keep careful records and itemize your taxes in order to claim the losses. So there you have it, that's what "itemizing your deductions" means. Another deduction you can take on your federal return to try to nip away at your tax bill is for the income taxes you must pay to your state on your winnings. If you itemize, you can deduct $400 for your losses, but your winnings and losses must be handled separately on your tax return. To report your gambling losses, you must itemize your income tax deductions on Schedule A. they can provide a win/loss report. 0 1 4,431 Reply. The good news: Theft losses that your insurance company doesn’t. Maintaining a journal or similar. If you itemize, you can deduct $400 for your losses, but your winnings and losses must be handled separately on your tax return. However, if your total itemized deductions are greater than the standard deduction available for your filing status, itemizing can lower your tax bill. “The U. For example, if you reported $6,000 of gambling income and $8,000 of losses, you’d only be able to deduct $6,000. To deduct gambling losses, you must provide records that show the amounts of both your winnings and losses, like: Receipts. make sure you take note of all gambling losses for the year including other casinos. You’ll need a record. You can’t deduct gambling losses if you take the standard deduction. It is very hard now to get to deduct losses. Technically speaking, these are not deductions at all, but adjustments to income, even though they are also called above-the-line deductions. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Need a coach for filing your income taxes?DoninGA. You may deduct gambling losses only if you itemize deductions. The deduction however, unlike the gambling deduction, is subject to the 2%. However, for a casualty loss that is the result of certain federally declared disasters (Form IT-196, line. If you're in the 22% federal tax bracket, you just saved $220. To enter the W-2G or other documents For your Gambling winnings--Go to Federal>Wages & Income>Less Common Income>Gambling Winnings. Example: John wins $23,500 during the year playing slots and other casino games. Secondly, the deduction for your losses is only available if you are eligible to itemize your deductions (have mortgage interest, real estate taxes, medical, charitable deductions, etc. You can't reduce your tax by your gambling losses, if you claim the standard deduction. ) If you claim the standard deduction, (because you don't have enough expenses to itemize) then you can't reduce your tax by your gambling losses and therefore. The policy allows you to deduct your gambling losses up to the amount you won during the year. Only professional gamblers can deduct non-wager losses and business expenses that create a net gambling loss. You can deduct your losses, but only if you itemize your deductions on Schedule A (Form 1040). Charitable Cash Contributions, Even If You Don’t Itemize. It’s also important to note that the only way you can deduct gambling losses is if you are already itemizing your deductions on a Schedule A. Gambling losses can only be deducted up to the amount of the gambling winnings. The maximum deduction you can make is $2,000. "For federal you have to show in the income on the 1040, your schedule "A" is where you take your itemized deductions and that's where you right off your gambling losses," Robinson said. However, if you itemize deductions on your tax return and claim losses (up to the amount of your winnings), then you may be able to deduct your losses on Line 27, Schedule A (Form 1040). Standard vs. However, if you have $5,000 of winnings and $10,000 of losses, you can only deduct $5,000 of losses. Residents: report the amount of wagering losses you. You can’t deduct your losses without reporting your wins. One tax reform-related change relevant to gambling is this: Because you must itemize gambling losses, it won't help if you don't have sufficient overall deductions to. Can I deduct gambling losses? Though your luck may have run out on your bets, there’s still good news regarding your taxes. You will still use Form 4684 to figure your losses and report them on Form 1040 , Schedule A. " But in 2020, you can deduct donations of up to $300 even if you don't itemize. Your gambling winnings or losses is generally reported on Form W-2G or via Form 5754. However, gambling losses can only be claimed if you itemize your deductions on Schedule A of your Form 1040. com. The deduction is equal to the wagering losses claimed by the taxpayer as an itemized deduction on the federal income tax return for the same tax year. Basically I got lucky and won two 777. If claiming Arizona itemized deductions, individuals must complete and include Federal. When you enter your gambling winnings in TurboTax, the interview will also ask you questions regarding gambling losses. Understanding how free slot games work with casino bonuses. Gambling losses are. That way, you don't leave anything on the table. Under Federal law, gambling losses are deductible for Federal tax purposes for those who are able to itemize their deductions. So that's one thing to. That won’t be the case for your state income tax filing under this new law in West Virginia. Can I Deduct Gambling Losses If I Don’t Itemize? No. 2022 - $8,000 gain. So if you had winnings of $2,000 and losses of $5,000, your deduction is. But if you don’t itemize, you cannot deduct those losses. But there are still some tax deductions - known as above-the-line deductions - you can take without itemizing. S. $27,700 for married taxpayers filing jointly or qualifying widows/widowers. Canceled checks or credit card statements aren't enough—you need to keep receipts and other bills showing what you spent the money on. You can only deduct gambling losses if you itemize your annual tax return. These can be found on the front of your federal Form 1040 in the Adjusted Gross Income section. This can be done using Schedule A, and please bear in mind that your losses in any year cannot exceed your winnings. Form 1040 Schedule A. Also, the amount of gambling losses you deduct cannot be more than the amount of gambling income you reported on your return. For example, if you have $5,000 in winnings but $8,000 in losses, your deduction is limited to. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. The maximum deduction is the amount of gambling income you reported on your tax return. If you gamble for fun, you can itemize deductions and include gambling losses, but only up to the amount that you also won. You can claim the lesser of your losses or $3000. To deduct your losses from gambling, you will need to: Claim your gambling losses on Form 1040, Schedule A as Other Miscellaneous Deduction (line 28) that is not subject to the 2% limit. The income will be offset by your deduction as mentioned above. (Note, again, that you'll generally only wind up using itemized deductions if you don't use the standard deduction. In addition, your gambling losses will only be able to be deducted on Schedule A if you itemize your deductions, as opposed to taking the standard deduction. You can't deduct it directly from the winnings. 20 Most. Gambling losses are reported on Schedule A (the form for itemizing). The new $10,000 federal cap on the itemized deduction for state and local taxes does not apply for Iowa purposes. If you have no winnings to claim, you can’t deduct your losses. Gambling losses are an itemized deduction; you can only get a deduction if the combination of all of your other itemized deductions exceeds your standard deduction. Special Rules for Married Couples—If one spouse itemizes deductions, the other must also itemize. 5 percent of the amount of your fed - eral adjusted gross income on Form OR-40, line 7, or Form OR-40-N or OR-40-P, line 29F. For tax purposes, gambling losses are tax deductible if you itemize your deductions and can provide detailed records of your winnings and losses. If you use itemized deductions, your gambling losses qualify as a deduction on your federal tax return. Note that if you don't itemize, you can't deduct your gambling losses: If you had $5000 in winning sessions and $6000 in losing sessions, you have to report the $5000 as income, and you can't subtract out your losses, because you're not itemizing. If you only claim standard deductions, you can’t use poker losses to offset your payable taxes. Itemized deductions are expenses that you can claim on your tax return. You are allowed to list your annual gambling losses as an itemized deduction on Schedule A of your tax return. Your deduction for charitable contributions generally can’t be more than 60% of your adjusted gross income, but in some cases 20%, 30%, or 50% limits may apply. If you do not have enough to itemize, however, you cannot deduct the gambling losses. In that scenario, you would be taxed on the $11K. , while gambling is not deductible. If I have w2-g's in the amount of $10,000 and my win/loss statement shows a net loss for the year of ($5000). You can only deduct gambling losses up to the amount of your winnings if. You can also deduct $900 of the additional losses on Schedule A if you itemize! (The $900 sessions gains on Form 1040 can be still be deducted from other losses on Schedule A. Also, keep detailed records of the gambling losses you deduct for a period of at least five years. For example, if you had $9,000 of gambling losses and had $2,000 of gambling winnings, you can only deduct $2,000 of your losses (the amount of your winnings). Unless your itemized deductions exceed your standard deduction, you won’t be able to deduct those losses. You can "back it out" as a negative number on the "other income" line (use the amount of the winnings as a negative number, don't create a loss on the tax return). Conversely, if you reported $12,000 of. YOU DO NOT PUT $500 IN THE INCOME SECTION. For taxpayers who do not gamble as their trade or business, losses from gambling transactions can be deducted as an itemized deduction to the extent of any gambling winnings. Gambling Losses are reported on Form 1040 Schedule A as a Miscellaneous itemized deduction. In addition, you won’t be able to write off gambling losses unless you itemize your deductions . Your total gambling deduction is limited to $800, the amount of your winnings. In other words, you can’t have a net gambling loss on your tax return. But even if you don't receive forms, the IRS mandates you report gambling wins as income. If you’re in the red for the year, don’t expect to recoup those losses with tax deductions. " “Gambling losses include the actual cost of wagers plus expenses incurred in connection with the conduct of the gambling activity. You can claim your losses as “other itemized deductions: gambling losses” on Form 1040, Schedule. they can provide a win/loss report. 02-01-2021 02:39 PM. The Internal Revenue Service allows you to deduct gambling losses if. Thus, a casual gambler may only use this new deduction if the taxpayer elected to itemize deductions on the federal income tax return rather than take the standard deduction. Some states either don't allow a deduction for gambling. This replaced a tiered system, which had higher rates based on the amount you. Finally, gambling losses can, in certain circumstances, trigger the dreaded Alternative Minimum Tax (AMT). If you itemize deductions, you could take a deduction for your gambling losses of $4245 ($2471 +. If you reported your $5,661 of income as 'hobby income', you would still need to itemize to deduct the $1,300 to offset any income. You can't offset your losses dollar for dollar against your gains. Gambling losses can be deducted up to the amount of gambling winnings. It makes zero incentive to use any Sportsbook apps. Casinos send a W-2G form to the IRS for winnings above specific thresholds ($600 or more for most games). You have to report that. 7. Another. What you have to report as income is your actual winning bets of $5000, NOT the $2529, because that numbers would be net winnings (winnings-losses).