Gambling Losses Tax Form

If your gambling losses along with your other itemized deductions do not exceed your standard deduction, then you will not see any tax benefit from claiming the gambling losses. You can use the instructions in the following TurboTax article to check whether you are claiming the standard deduction or itemized deductions.

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.
Gambling losses are only allowed up to the amount of your gambling winnings. For example, if you had $9,000 of gambling losses and had $2,000 of gambling winnings, you can only deduct $2,000 of your losses (the amount of your winnings). If you had no winnings, you will not be able to deduct your losses.

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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

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!

Tax Form For Gambling Losses

To deduct gambling losses, you must document:

The date and type of gambling activity
The name and address of the gambling establishment
The names of anyone who was present with you at the gambling establishment
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.

Key takeaway

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 information in this article is up to date through tax year 2019 (taxes filed in 2020).

Every year, people flock to casinos in hopes of hitting it big. And since sports betting has been legalized, more people are engaging in gambling than before.

Tax Forms For Gambling Losses

One thing to be aware of, though, is that certain winnings are taxable and are reported on IRS Form W-2 G. This document outlines your gambling winnings from a specific establishment. They should prepare the form to send to you and the IRS.

Gambling Losses On Tax Form

How do I get my Form W-2 G?

It’s the gambling establishment’s responsibility to fill out and submit Form W-2 G to the IRS. The copy that you receive is for you to report on your tax return. If you haven’t received your W-2 G or you lost it, contact the gambling institution to get it reissued, or contact the IRS directly since they will already have a copy.

Do I have to pay tax on my winnings?

Gambling Losses On Tax Form

Only winnings above a certain amount in certain games are reported on IRS form W-2 G. It is important to understand that “winnings” refer to the net amount. So, if you wager $1,000 and win $2,000, your winnings are $1,000.

Only winnings above a certain amount from specific games will be reported on form W-2 G. Those include: