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Is are gambling losses deductible tax 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.

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 winnings reported as income. For example, if you win $5,000 in gambling but lose $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. Professional gamblers, who treat gambling as a business, may have different rules and should consult specific IRS guidance.

Where to Put It on the Tax Form

Schedule A, Line 16.

Real World Example

A freelance writer who occasionally gambles wins $2,000 at a casino but loses $3,000 over the year. They report $2,000 as income and can deduct $2,000 of their losses on Schedule A, provided they itemize deductions.

Audit Risk & Documentation Tips

Moderate audit risk. Taxpayers should keep detailed records of gambling activities, including receipts, tickets, statements, and a log of wins and losses. Documentation should clearly show the amounts of both winnings and losses to substantiate the deduction.

IRS Reference

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

Relevant Industries

Professional GamblersCasino EmployeesFreelancers who gamble

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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 25, 2025

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