Gamblers understand the concept of win some, lose some. But the IRS? It prefers exact numbers. Specifically, your tax return should reflect your total year's gambling winnings – from the big blackjack score to the smaller fantasy football payout. That's because you're required to report each stroke of luck as taxable income — big or small, buddy or casino.
If you itemize your deductions, you can offset your winnings by writing off your gambling losses.
It may sound complicated, but TaxAct will walk you through the entire process, start to finish. That way, you leave nothing on the table.
You can deduct your gambling losses on Schedule A, Itemized Deductions. The amount you can deduct is limited to the amount of the gambling income you report on your return. The IRS requires U.S. Citizens to report all gaming income on their tax return, even if you did not receive a W2-G. You can report gambling losses on Schedule A as a way to reduce your tax. Amount of your gambling winnings and losses. Any information provided to you on a Form W-2G. The tool is designed for taxpayers who were U.S. Citizens or resident aliens for the entire tax year for which they're inquiring. If married, the spouse must also have been a U.S. Citizen or resident alien for the entire tax year. Jun 06, 2019 You are only able to deduct gambling losses to the extent of gambling winnings. So you will have to report all the money you win as taxable income on your return. And the amount of gambling losses that you can deduct can't exceed the winnings you report as income.
How much can I deduct in gambling losses?
You can report as much as you lost in 2019 , but you cannot deduct more than you won. And you can only do this if you're itemizing your deductions. If you're taking the standard deduction, you aren't eligible to deduct your gambling losses on your tax return, but you are still required to report all of your winnings.
Where do I file this on my tax forms?
Let's say you took two trips to Vegas this year. In Trip A, you won $6,000 in poker. In the Trip B, you lost $8,000. You must list each individually, with the winnings noted on your return as taxable income and the loss as an itemized deduction in Schedule A. In this instance, you won't owe tax on your winnings because your total loss is greater than your total win by $2,000. However, you do not get to deduct that net $2,000 loss, only the first $6,000.
Now, let's flip those numbers. Say in Trip A, you won $8,000 in poker. In Trip B, you lost $6,000. You'll report the $8,000 win on your return, the $6,000 loss deduction on Schedule A, and still owe taxes on the remaining $2,000 of your winnings.
What's a W-2G? And should I have one?
A W-2G is an official withholding document; it's typically issued by a casino or other professional gaming organization. You may receive a W-2G onsite when your payout is issued. Or, you may receive one in the mail after the fact. Gaming centers must issue W-2Gs by January 31. When they send yours, they also shoot a copy to the IRS, so don't roll the dice: report those winnings as taxable income.
Where Do You Report Gambling Losses On Tax Return 2017
Don't expect to get a W-2G for the $6 you won playing the Judge Judy slot machine. Withholding documents are triggered by amount of win and type of game played.
Expect to receive a W-2G tax form if you won:
- $1,200 or more on slots or bingo
- $1,500 or more on keno
- $5,000 or more in poker
- $600 or more on other games, but only if the payout is at least 300 times your wager
Tip: Withholding only applies to your net winnings, which is your payout minus your initial wager.
What kinds of records should I keep?
Keep a journal with lists, including: each place you've gambled; the day and time; who was with you; and how much you bet, won, and lost. You should also keep receipts, payout slips, wagering tickets, bank withdrawal records, and statements of actual winnings. You may also write off travel expenses associated with loss, so hang on to airfare receipts.
Use TaxAct to file your gambling wins and losses. We'll help you find every advantage you're owed – guaranteed.
Where Do You Report Gambling Losses On Tax Return Due Date
More to explore:
Six Tips on Gambling Income and Losses
Whether you roll the dice, play cards or bet on the ponies, all your winnings are taxable. The IRS offers these six tax tips for the casual gambler.
- Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.
- If you win, you may receive a Form W-2G, Certain Gambling Winnings, from the payer. The form reports the amount of your winnings to you and the IRS. The payer issues the form depending on the type of gambling, the amount of winnings, and other factors. You'll also receive a Form W-2G if the payer withholds federal income tax from your winnings.
- You must report all your gambling winnings as income on your federal income tax return. This is true even if you do not receive a Form W-2G.
- If you're a casual gambler, report your winnings on the 'Other Income' line of your Form 1040, U. S. Individual Income Tax Return.
- You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference.
- You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.
Proof:
- Bingo and similar games: Keep records of the number of games played, the cost of cards purchased, and amounts collected on winning cards.
- Slot machines: Maintain a record of the machine number and all winnings by date and time the machine was played.
- Casino table games (e.g., blackjack, craps, poker and roulette): Write down the number of the table where you played and any casino credit information.
- Racing (horses, harness, dog, etc.): Keep track of the number of races, the amounts of your wagers and the amounts you won and lost.
For residents of Connecticut, Illinois, Indiana, Kansas, Massachusetts, Michigan, North Carolina, Ohio, Rhode Island, West Virginia, and Wisconsin, beware. These states do not allow amateur gamblers to deduct their losses from their winnings. For example, if an amateur gambler in Ohio wins $50,000 and loses $50,000, they may not deduct their losses even though they technically broke even.
This is not the case if the taxpayer is a professional gambler such as a professional poker player. They may deduct gambling losses from their state income taxes but they are aggressively challenged for their status as professional.
So remember to consider the tax implications for gambling winnings and losses and plan accordingly based on your gambling status and the state you live in.
IRS Resources
- Publication 525, Taxable and Nontaxable Income
- Publication 529, Miscellaneous Deductions
- Tax Topic 419, Gambling Income and Expenses
- Form W-2G, Certain Gambling Winnings
IRS YouTube Videos:
What kinds of records should I keep?
Keep a journal with lists, including: each place you've gambled; the day and time; who was with you; and how much you bet, won, and lost. You should also keep receipts, payout slips, wagering tickets, bank withdrawal records, and statements of actual winnings. You may also write off travel expenses associated with loss, so hang on to airfare receipts.
Use TaxAct to file your gambling wins and losses. We'll help you find every advantage you're owed – guaranteed.
Where Do You Report Gambling Losses On Tax Return Due Date
More to explore:
Six Tips on Gambling Income and Losses
Whether you roll the dice, play cards or bet on the ponies, all your winnings are taxable. The IRS offers these six tax tips for the casual gambler.
- Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.
- If you win, you may receive a Form W-2G, Certain Gambling Winnings, from the payer. The form reports the amount of your winnings to you and the IRS. The payer issues the form depending on the type of gambling, the amount of winnings, and other factors. You'll also receive a Form W-2G if the payer withholds federal income tax from your winnings.
- You must report all your gambling winnings as income on your federal income tax return. This is true even if you do not receive a Form W-2G.
- If you're a casual gambler, report your winnings on the 'Other Income' line of your Form 1040, U. S. Individual Income Tax Return.
- You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference.
- You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.
Proof:
- Bingo and similar games: Keep records of the number of games played, the cost of cards purchased, and amounts collected on winning cards.
- Slot machines: Maintain a record of the machine number and all winnings by date and time the machine was played.
- Casino table games (e.g., blackjack, craps, poker and roulette): Write down the number of the table where you played and any casino credit information.
- Racing (horses, harness, dog, etc.): Keep track of the number of races, the amounts of your wagers and the amounts you won and lost.
For residents of Connecticut, Illinois, Indiana, Kansas, Massachusetts, Michigan, North Carolina, Ohio, Rhode Island, West Virginia, and Wisconsin, beware. These states do not allow amateur gamblers to deduct their losses from their winnings. For example, if an amateur gambler in Ohio wins $50,000 and loses $50,000, they may not deduct their losses even though they technically broke even.
This is not the case if the taxpayer is a professional gambler such as a professional poker player. They may deduct gambling losses from their state income taxes but they are aggressively challenged for their status as professional.
So remember to consider the tax implications for gambling winnings and losses and plan accordingly based on your gambling status and the state you live in.
IRS Resources
- Publication 525, Taxable and Nontaxable Income
- Publication 529, Miscellaneous Deductions
- Tax Topic 419, Gambling Income and Expenses
- Form W-2G, Certain Gambling Winnings
IRS YouTube Videos:
- Gambling Winnings and Losses – English | Spanish | ASL
- Record Keeping – English | Spanish | ASL
IRS Podcasts:
Where Do You Report Gambling Losses On Tax Return Tax
- Gambling Winnings and Losses – English | Spanish
Where Do You Report Gambling Losses On Tax Return 2019
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