Your gambling losses may be tax deductible.
If you itemize your deductions on Schedule A and keep a record of your gambling winnings and losses, you may be able to deduct your gambling losses. If you claim the standard deduction, then you cannot deduct gambling losses and you are still obligated to report and pay tax on all winnings you earned within the year.
This deduction includes winnings and losses from:
- Horse and dog races
- Casino games
- Poker games
- Sports betting
However, the number of gambling losses you deduct can’t be more than the number of gambling winnings that you report on your return. For example, if you have $3,500 in winnings but $8,000 in losses, your deduction will be limited to $3,500. The remaining $4,500 is not eligible for write-off and you may not carry it forward to future years.
An accurate record of such winnings and losses is necessary to claim this deduction. Examples of this type of record may include receipts, tickets, or statements that show the number of your winnings and losses. These records must include:
- The date and type of gambling engaged in
- The name and address of the places where you gamble
- The people you gambled with
- The number of your wins and losses.
Other kinds of documentation to prove your losses can include Form W-2G, Form 5754, wagering tickets, canceled checks or credit records, and receipts from the gambling facility.
The professionals at The Center are more than knowledgeable on gambling deductions and various other deductions. For more information, please contact us at (618) 997-3436.