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How do I deduct are gambling losses deductible on my taxes?

TL;DR

Gambling losses are deductible, but only to the extent of gambling winnings and if you itemize deductions.

Detailed Answer

Gambling losses can be deducted on your taxes, but only if you itemize deductions on your tax return. You can only deduct losses up to the amount of your gambling winnings. For example, if you won $5,000 and lost $7,000, you can only deduct $5,000 in losses. Additionally, you must keep accurate records of your gambling activities, including receipts, tickets, and other documentation that can substantiate your losses.

Where to Put It on the Tax Form

Report gambling winnings on Form 1040, Schedule 1, Line 8. Deduct gambling losses on Schedule A, Line 16.

Real World Example

A taxpayer wins $10,000 from a casino and incurs $12,000 in gambling losses over the year. They can report the $10,000 as income and deduct $10,000 in losses if they itemize deductions, but the remaining $2,000 in losses cannot be deducted.

Calculation Required

A calculation is required for this deduction.

Calculate the total amount of gambling winnings and compare it to the total gambling losses. Deduct losses up to the amount of winnings.

Audit Risk & Documentation Tips

To minimize audit risk, keep detailed records of all gambling activities, including receipts, tickets, and statements showing winnings and losses. Maintain a gambling log with dates, locations, and amounts won or lost.

IRS Reference

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

Relevant Industries

GamblingCasinosProfessional Gamblers

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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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