Claiming Gambling Losses In 2018

3/28/2022 admin

Gambling, Taxes. By Scott C. Cashman. December 14, 2018. Massachusetts Tax Deduction for Gambling Losses. Since the MGM casino opened in August, gamblers have reportedly wagered more than $428 million on MGM Springfield’s slot machines that generated about $40 million in revenue for MGM and reportedly another $18.5 million in revenue from table games.
Jul 27, 2017 The rule for claiming gambling losses is that you can only claim up to the dollar amount you won gambling. If Form 1099G from the IRS shows gambling winnings of $5,000, you can claim losses of no more than $5,000, even if your losses were far greater.
Also, the amount of gambling losses you deduct cannot be more than the amount of gambling income you reported on your return. The Tax Cuts and Jobs Act of 2017 eliminated most miscellaneous itemized deductions allowable that are over 2% of adjusted gross income (AGI) in tax years 2018 through 2025, but gambling expenses are preserved.

Gamblers understand the concept of win some, lose some. But the IRS? It prefers exact numbers. 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.

You may deduct gambling losses on your Minnesota income tax return if you choose to claim Minnesota itemized deductions. You cannot deduct more in gambling losses than you report in gambling winnings on your federal income tax return. Also, you must be able to prove the amount of your losses with the records noted above. 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.

If you itemize your deductions, you can offset your winnings by writing off your gambling losses.

It may sound complicated, but TaxAct will walk you through the entire process, start to finish. That way, you leave nothing on the table.

How much can I deduct in gambling losses?

You can report as much as you lost in 2019 , but you cannot deduct more than you won. And you can only do this if you’re itemizing your deductions. If you’re taking the standard deduction, you aren’t eligible to deduct your gambling losses on your tax return, but you are still required to report all of your winnings.

Where do I file this on my tax forms?

Let’s say you took two trips to Vegas this year. In Trip A, you won $6,000 in poker. In the Trip B, you lost $8,000. You must list each individually, with the winnings noted on your return as taxable income and the loss as an itemized deduction in Schedule A. In this instance, you won’t owe tax on your winnings because your total loss is greater than your total win by $2,000. However, you do not get to deduct that net $2,000 loss, only the first $6,000.

Now, let’s flip those numbers. Say in Trip A, you won $8,000 in poker. In Trip B, you lost $6,000. You’ll report the $8,000 win on your return, the $6,000 loss deduction on Schedule A, and still owe taxes on the remaining $2,000 of your winnings.

What’s a W-2G? And should I have one?

A W-2G is an official withholding document; it’s typically issued by a casino or other professional gaming organization. You may receive a W-2G onsite when your payout is issued. Or, you may receive one in the mail after the fact. Gaming centers must issue W-2Gs by January 31. When they send yours, they also shoot a copy to the IRS, so don’t roll the dice: report those winnings as taxable income.

Don’t expect to get a W-2G for the $6 you won playing the Judge Judy slot machine. Withholding documents are triggered by amount of win and type of game played.

Expect to receive a W-2G tax form if you won:

$1,200 or more on slots or bingo
$1,500 or more on keno
$5,000 or more in poker
$600 or more on other games, but only if the payout is at least 300 times your wager

Tip: Withholding only applies to your net winnings, which is your payout minus your initial wager.

What kinds of records should I keep?

Keep a journal with lists, including: each place you’ve gambled; the day and time; who was with you; and how much you bet, won, and lost. You should also keep receipts, payout slips, wagering tickets, bank withdrawal records, and statements of actual winnings. You may also write off travel expenses associated with loss, so hang on to airfare receipts.

Use TaxAct to file your gambling wins and losses. We’ll help you find every advantage you’re owed – guaranteed.

Claiming Gambling Losses In 2018 Date

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Six Tips on Gambling Income and Losses

Whether you roll the dice, play cards or bet on the ponies, all your winnings are taxable. The IRS offers these six tax tips for the casual gambler.

Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.
If you win, you may receive a Form W-2G, Certain Gambling Winnings, from the payer. The form reports the amount of your winnings to you and the IRS. The payer issues the form depending on the type of gambling, the amount of winnings, and other factors. You’ll also receive a Form W-2G if the payer withholds federal income tax from your winnings.
You must report all your gambling winnings as income on your federal income tax return. This is true even if you do not receive a Form W-2G.
If you’re a casual gambler, report your winnings on the “Other Income” line of your Form 1040, U. S. Individual Income Tax Return.
You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference.
You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.

Proof:

Bingo and similar games: Keep records of the number of games played, the cost of cards purchased, and amounts collected on winning cards.
Slot machines: Maintain a record of the machine number and all winnings by date and time the machine was played.
Casino table games (e.g., blackjack, craps, poker and roulette): Write down the number of the table where you played and any casino credit information.
Racing (horses, harness, dog, etc.): Keep track of the number of races, the amounts of your wagers and the amounts you won and lost.

For residents of Connecticut, Illinois, Indiana, Kansas, Massachusetts, Michigan, North Carolina, Ohio, Rhode Island, West Virginia, and Wisconsin, beware. These states do not allow amateur gamblers to deduct their losses from their winnings. For example, if an amateur gambler in Ohio wins $50,000 and loses $50,000, they may not deduct their losses even though they technically broke even.

This is not the case if the taxpayer is a professional gambler such as a professional poker player. They may deduct gambling losses from their state income taxes but they are aggressively challenged for their status as professional.

So remember to consider the tax implications for gambling winnings and losses and plan accordingly based on your gambling status and the state you live in.

IRS Resources

Publication 525, Taxable and Nontaxable Income
Publication 529, Miscellaneous Deductions
Tax Topic 419, Gambling Income and Expenses
Form W-2G, Certain Gambling Winnings

Claiming Gambling Losses In 2018 2019

IRS YouTube Videos:

Gambling Winnings and Losses – English Spanish ASL
Record Keeping – English Spanish ASL

IRS Podcasts:

Claiming Gambling Losses In 2018

Gambling Winnings and Losses – English Spanish