Can I Write This Off?

Can you write off are gambling losses deductible?

TL;DR

Gambling losses are deductible, but only to the extent of gambling winnings and only if you itemize deductions on your tax return. This deduction is often misunderstood as being unlimited or available without winnings.

Detailed Answer

Gambling losses can be deducted on your tax return, but only if you itemize deductions using Schedule A. The deduction is limited to the amount of gambling income you report as taxable income. For example, if you won $5,000 from gambling and lost $7,000, you can only deduct $5,000 of your losses. It's important to keep detailed records of both winnings and losses, including receipts, tickets, and statements. Gambling losses cannot be carried over to future years, and they must be claimed in the year they occurred.

Where to Put It on the Tax Form

Schedule A, Line 16

Real World Example

A freelance writer who occasionally gambles wins $3,000 from a casino and incurs $4,500 in losses over the year. When filing taxes, they can deduct $3,000 of their losses on Schedule A, provided they itemize deductions.

Audit Risk & Documentation Tips

Audit risk is moderate due to the potential for abuse. Taxpayers should keep all relevant documentation, such as receipts, tickets, and casino statements, to substantiate both winnings and losses. A gambling log detailing dates, locations, amounts won and lost, and the nature of the gambling activity is also recommended.

IRS Reference

IRS Publication 529, Miscellaneous Deductions

Relevant Industries

Professional GamblersCasual GamblersCasino Employees

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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