Gambling Losses Tax Form

  1. Gambling Losses Tax Form
  2. Tax Form For Gambling Losses
  3. Gambling Losses Tax Form
  4. 2019 Tax Forms Gambling Losses

Use Form 1099G to report your gambling losses on your federal income tax return. The IRS mails this form no later than Jan. It shows the total amount of your gambling winnings, which you must claim on Form 1040, line 21. Specific Instructions for Form W-2G File Form W-2G, Certain Gambling Winnings, to report gambling winnings and any federal income tax withheld on those winnings. The requirements for reporting and withholding depend on the type of gambling, the amount of the gambling winnings, and generally the ratio of the winnings to the wager.

Gambling Losses Tax Form

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To offset the taxes applied to gambling winnings, you may list your gambling losses as a deduction on your tax return. Unlike most other deductions, gambling losses are not subject to the 2-percent limit on Form 1040, Schedule A. However, the total amount of losses you deduct cannot exceed your total winnings. Specifically, your tax return should reflect your total year’s gambling winnings – from the big blackjack score to the smaller fantasy football payout. That’s because you’re required to report each stroke of luck as taxable income — big or small, buddy or casino. Generally, you'll receive an IRS Form W-2G if your gambling winnings are at least $600 and the payout is at least 300 times the amount of your wager.

Do you roll the dice? Enjoy the slot machines? Even as a casual gambler, your winnings are fully taxable and must be reported on your tax return. Learn more about how the Tax Cuts and Jobs Act impacts gambling.

There are unique considerations when it comes to disclosing gambling wins and losses on your tax return….modified recently under the Tax Cuts and Jobs Act (TCJA). If you gamble, make sure you understand the tax consequences.

First off—what counts as gambling in the eyes of the IRS?

Gambling income includes (but is not limited to)

  • Winnings from
  • Lotteries
  • Raffles
  • Horse races
  • Casinos
  • Cash winnings
  • Fair market value of prizes (like cars and trips)

The general rules

Wins

You are required to report 100% of gambling winnings as taxable income on your 1040. In addition, all complimentary offerings provided by casinos and gambling establishments must also be included in winnings. Winnings are subject to your federal income tax rate (though rates have been reduced under the TCJA-check out our blog, 2018 Tax Reform Provisions for Individuals for more on this).

Also, if you receive a certain amount of gambling winnings or if you have any winnings that are subject to federal tax withholding, the payer must issue you a Form W-2G “Certain Gambling Winnings”.

In other words, the payer is required to issue you a W-2 G if you receive (according to the IRS).

  • $1,200 or more in gambling winnings from bingo or slot machines;
  • $1,500 or more in proceeds (the amount of winnings minus the amount of the wager) from keno (a game of chance similar to lotto);
  • More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament;
  • $600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or
  • Any other gambling winnings subject to federal income tax withholding.

Losses

Tax forms for gambling losses

Gambling losses can be written off as miscellaneous itemized deductions. The gambling loss deduction is limited to the extent of your winnings for the year and excess losses cannot be carried forward to future years.

Under the TCJA, misc. deductions subject to the 2% of adjusted gross income floor are not allowed, however certain deductions (including the gambling loss deduction) are still deductible.

However, since the standard deduction for 2018 was nearly doubled by the TCJA, many taxpayers may no longer benefit from itemizing, seeing as itemizing saves tax only when the total itemized deductions exceed the applicable standard deduction.

How do you claim a deduction for gambling losses?

Recordkeeping is key!

To deduct gambling losses, you must document:

  1. The date and type of gambling activity
  2. The name and address of the gambling establishment
  3. The names of anyone who was present with you at the gambling establishment
  4. The amount won or lost

**You can document gambling on table games by recording the number of the table you played and retain statements showing casino credit issued to you. As far as lotteries go, you can use winning statements and unredeemed tickets as documentation.

Gambling Losses Tax Form

Key takeaway

Gossip slots casino no deposit bonuses. The TCJA adds limitations to the gambling loss deduction — you can now only deduct losses up to the amount of your winnings. Any excess loss cannot offset other highly taxed income. Thus, those in the trade or business of gambling, may no longer deduct non-wagering expenses, such as travel expenses or fees, to the extent those expenses exceed gambling gains.

Questions? Contact us.

The TCJA…So Many Changes, So Many Questions…we can help you navigate this huge tax overhaul! Visit our Tax Reform Center for everything you and your business need to know, now.

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The IRS views winnings from gambling as taxable income, but did you know that you’re allowed to deduct gambling losses, too? While losing money at a casino or the racetrack does not by itself relieve your tax burden, it can reduce taxes owed for your other winnings, ultimately saving you money.

How to know if you can deduct your gambling losses

Gambling loss deductions save you money by reducing your taxable income. But there’s a trick to this—you can’t claim gambling losses that exceed your winnings, as losses are inextricably linked to your winnings for tax purposes. If you have no winnings to claim, you can’t deduct your losses.

As an example, let’s say that in a given year you went gambling twice, winning $6,000 in one instance, but losing $8,000 in another. In this case, you can only deduct $6,000 from that $8,000 loss. The remaining $2,000 in losses can’t be carried forward or written off. Conversely, if you won more than you lost, you’d owe taxes on the difference between your winnings and losses as “other income”—but at least those taxes would be reduced.

(If you’re a full-time, professional gambler the requirements are different: you will report your earnings like they have resulted from a business, as self-employed income).


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How to claim gambling losses

Deductible gambling losses can result from online casinos, poker games, sports betting, lotteries, prize draws, horse and dog racing, and even your office fantasy sports pool. To report any of these gambling losses, you’ll be required to itemize your deductions. This makes sense if the total of all your itemized deductions exceeds the standard deduction ($12,400 for taxpayers who are single or are filing separately from their spouse). If you claim the standard deduction, you don’t get the opportunity to reduce taxes for winnings owed by deducting gambling losses.

Keep in mind that you must be able to substantiate any losses you’re claiming, which means you’ll need to keep records of your gambling.

Tax Form For Gambling Losses

Track your winnings and losses

You can’t just say “I lost a bunch of money gambling” to the IRS. They require you to provide records of your winnings and losses to back your claim. Therefore, you should keep track of:

  • the date and time of your gambling session
  • the type of gambling
  • the name and location of the gambling venue
  • the people you gambled with
  • how much you bet, won and lost

You should also keep credit cards statements, payout slips, receipts, tickets, bank withdrawal records, and statements of actual winnings. Other documentation can include:

Gambling Losses Tax Form

  • Form W-2G (typically given or mailed to you by casinos after a big payout)
  • Form 5754 (a form for when you’re part of a group that earns money through gambling; you might see one of these if you and your co-workers are cashing in a winning lottery ticket)

2019 Tax Forms Gambling Losses

Do you or someone you know need help with a gambling problem? Call the National Problem Gambling Helpline Network (1-800-522-4700).