Can I Write This Off?

can i write off my gambling losses?

TL;DR

Yes, you can deduct your gambling losses, but only to the extent of your gambling winnings.

Detailed Answer

Gambling losses are indeed tax deductible, but only to the extent of your winnings. This requires you to report all the money you win as taxable income on your return. However, the deduction for your losses is only available if you are eligible to itemize your deductions. If you claim the standard deduction, then you can't reduce your tax by your gambling losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. For example, if you have $5,000 in winnings but $7,000 in losses, your deduction is limited to $5,000. You could not write off the remaining $2,000.

Where to Put It on the Tax Form

Report gambling losses on Schedule A (Form 1040), line 28.

Real World Example

For example, if you won $5,000 from gambling during the year, but lost $6,000, you can only deduct $5,000 of your losses. The remaining $1,000 is not deductible.

Calculation Required

A calculation is required for this deduction.

To calculate your deduction, add up all your gambling losses for the year. Then, compare this total to your total gambling winnings. Your deduction is the lesser of these two amounts.

Audit Risk & Documentation Tips

This deduction can increase your risk of an audit, especially if the amounts are large. Keep detailed records of your gambling activities, including dates, types of wagering, amounts won or lost, and the names and addresses of the gambling establishments. Also keep any related documents, such as W-2G forms, losing tickets, and casino credit slips.

IRS Reference

IRS Topic No. 419 Gambling Income and Losses, IRS Publication 529, 'Miscellaneous Deductions'

Relevant Industries

GamblersCasino IndustryHorse RacingSports Betting