For example, if I showed $25,000 in gambling winnings on my W2G's at the end of the year, but my players card showed I put $22,000 into the casino, I could deduct the. Bookmark. The IRS takes gambling income and losses very seriously, and failure to report them on your tax return can result in penalties and even an audit. $5,000 or more from a poker tournament, minus. But there are two important exceptions. 15, 2023 The Tax Blotter is a round-up of recent tax news. At the end of the year, A had total wagering gains of $100,000, total wagering losses of $75,000, and incurred $15,000 inA high-level overview of sports betting and tax reporting. And for sports betting and fantasy leagues, if you make $600 or more, then the payer is going to report it to the IRS. However, your annual losses are deductible only up to the amount of your winnings. 4% of people with income over 1 million were audited. All winnings from gambling activities must be included when computing the deductible gambling losses, which is generally always an issue in a gambling loss audit. In conclusion, gambling losses can be deductible on your federal tax return, but only up to the amount of your winnings. For example, if you win $620 from a horse race but it cost you $20 to bet, your taxable winnings are $620, not $600 after subtracting your $20 wager. Stay up-to-date on. Gambling losses are often a trigger for IRS audits because most people don't keep careful records of how much they lost while at the casino, racetrack, or another gambling establishment. 3. What happens if the IRS audits you:What to know about IRS audit letters and more. All winnings are taxable whether you win enough at one time to generate a tax form W2G or not. However, the total tax increased. Unfortunately that is not true; tax law requires all winnings to be reported whether or not included in a W-2G. Gambling income is almost always taxable income which is reported on your tax return as Other Income on Schedule 1 - eFileIT. ” The Commissioner noticed the casualty loss and selected the return for audit. For example, if a gambler plays the slot machines at two separate casinos in the same day, the gambler has two gambling sessions. You can deduct gambling losses, but only up to the amount of your. The Tax Code requires gamblers to record their wins and losses by session. For amateur gamblers, gambling losses are reported as an itemized deduction on Schedule A, Itemized Deductions. Turbotax filing losses casino. Of those, 89 cases led to indictments, with a 96% conviction rate for prosecuted cases, and an average sentence was 23 months in prison for adjudicated cases. At the end of the day, it’s your responsibility to report any winnings. In a scenario where you won $10,000 in a year but lost $13,000, you could. On audit, the IRS is more likely to demand that a taxpayer substantiate his or her gambling losses. The Courts and the IRS have interpreted Section 165 (d) of the Internal Revenue Code in such a way that gambling activities cannot be. 58% for certain The gaming establishment is required to issue you a W-2G form whenever you win above certain amounts. It is possible that a 1099-K can trigger an IRS audit since the amount reported may be above your taxable winnings. Photos; Consent for use of PicturesIf you need assistance, visit our website at tax. You should show your gambling winnings as income and then your gambling losses as an itemized deduction, if you qualify. The IRS audits gambling income as many taxpayers cannot substantiate the amount of their gambling losses. Gambling losses become a tax deduction if you used itemized versus standard deductions. Date and type of specific wager or wagering activity; 2. In the past. Enter your winnings in the Form W-2G topic or as Other Income. That means you might have to pay taxes on those winnings. See moreWhile you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit. Gambling winnings ($500) cannot be reduced by gambling losses ($400), and only the difference ($100) is reported as income. Because casinos report larger winnings to the IRS on Form W-2G, failing to use this method may cause the IRS to see a discrepancy and trigger an audit. September 12, 2023 — As football season kicks off, U. We file. When you win $500 for one bet, you must report the entire $500 as taxable income. About Form W-2 G, Certain Gambling Winnings. For example, if you wagered $5,000 and won $2,000, you can only deduct $2,000 in losses. As a result. I also have bank statements. 2, To claim gambling losses, you need have sufficient records of your losses. Publication Date: 09/2021. His gambling losses are $37,900. See Pub. ized deduction for gambling losses of $23,480. This applies to most Players. A W2-G is issued to anyone who wins more than $1,500 in a poker tournament or $1,200 from slot machines, bingo, or keno. $1,500 or more from keno. Form W-2G is issued when gambling winnings other than those from bingo, slot machines, keno, and poker tournaments are $600 or more if the amount is at least 300 times the wager amount. If you tend to gamble at the same casino, or group of casinos, you will likely. Upon audit, the IRS disallowed the original casualty loss deduction on the 2010 tax return and assessed Mancini a 20% Sec. This could eventually result in an IRS audit. I’m trying to plan for best way to file my 2022 taxes and am caught up on correct way to report gambling winnings and deduct losses hypothetical round number. 👉 How to prove my gambling losses How to prove my gambling losses Daily quests: Each day of the week, players get different bonuses for depositing a certain sum. Unfortunately, the IRS has a different viewpoint. S. State taxes on gambling winnings range from 3% to as high as 10%. Consult your own attorney for legal advice. Any information provided to you on a Form W-2G. Therefore, if you lost $3,000 gambling, and won $1,000 of it back, only $1,000 can be deducted as a gambling loss on your tax return under Schedule A. , deduction for self-employment tax). In other situations and scenarios, gambling losses do not always trigger IRS Audits. Also, gambling losses can’t be carry-forwarded to offset winnings in another year. This definition covers various types of winnings, whether received in cash or non-cash prizes. Irs gambling losses, how to play blackjack live. Product name, i told me your return. For example, if your AGI is $50,000, you can only deduct losses that exceed $1,000 (2% of $50,000). Then, you may utilise this record to demonstrate that you had specific losses or. According to Topic 419 - Gambling Income and Losses on the IRS web site, "it is important to keep an accurate diary or similar record of your gambling wins and losses. It’s vital to keep a good record of your winnings too, especially if you incurred a large gambling loss during the tax year. Losses must be reported to the IRS, just like your winnings. September 10, 2023 Posted by. Ask Your Own Tax Question. 165(d). The only amount that can be deducted is the amount spent exclusively on gambling. The central issue raised by the Service on audit is not always the right to a deduction for gambling losses—allowed by Sec. Colorado has a flat state income tax of 4. Jun. Report all your. Let’s assume that’s $12,000. Between 2021 and 2023, IRS criminal investigators initiated over 100 investigations into illegal gambling totaling more than $178 million. Call RJS LAW for a free consultation if you are being audited (619) 595-1655 The Unites States has what is often referred to as a self-assessed tax system. Another thing that the IRS doesn’t let you do is to net your gambling winnings and losses together. 8 out of every 1,000 returns filed (0. Of course, casinos will issue a Form W-2G, whenever taxes are withheld. Tickets. However, you can only deduct your loss up to the amount you report as gambling winnings. That is, if you won $50,000 and lost $55,000, you could only deduct $50,000 of your losses. gambling lossesGambling losses cannot be greater than gambling wins for the tax year. If you itemize, you can deduct $400 for your losses, but your winnings and losses must be handled separately on your tax return. While the IRS does not have a gambling losses tax, it does allow for you to deduct gambling losses on your tax return in the form of a miscellaneous deduction. Practitioners may need to. Stephen G. Are casino jackpots taxable in california, irs gambling losses audit. Mancini wasn’t done filing returns for 2008-10 though. S. 3. The deduction for gambling losses is found on Schedule A. Under IRS regulations, you must maintain complete records of all your gambling profits and losses. The number. According to IRS Revenue Procedure 77-29, the diary should contain all of the following: Date and type of specific wager or activity. These red flags need to be closely inspected, in order to avoid IRS Audits as much as possible. If it’s a profit I would net the W-2G amount to match the profit. Failure to report gambling winnings can draw IRS attention, especially if the casino or other venue reported the amounts on Form W-2G. 4 billion. TABLE OF CONTENTS Claiming gambling. And for sports betting and fantasy leagues, if you make $600 or more, then the payer is going to report it to the IRS. e. For example, receipts from a casino's ATM machine, tickets, statements or a diary. Although he had substantial earnings through. A CP2000 is not an audit. 3. I've never had an audit on the issue but Rev. Taxable Gambling Income. March 3, 2015. (3:06) How GSG can help. By test41313093 on 9 September 2023. This change makes documenting and reporting your income from gambling on your 2022 1040 even more. S. For federal purposes, you can no longer claim an itemized deduction for a casualty or theft loss unless it is the result of a federally declared disaster. But if you file a Schedule C to report profit or loss from a business. read more. If you itemize your deductions, you can deduct your gambling losses for the year on Schedule A. In addition to what Opus 17 said, you may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. $1,500 or more from keno after your wager. I have a journal that shows my deposits and withdrawals for each day for the online site and for the Tribal Casino I have recorded how much cash I had for the day and how much I brought home . To calculate your gambling losses, you should keep accurate records. In fact, last year the IRS audited about 1% of. 0 11 1,291 Reply. Also, watch out for the Automated Under-Reporter Exams, which begin with an IRS Notice CP2000 . Call RJS LAW for a free consultation if you are being audited (619) 595-1655The Unites States has what is often referred to as a self-assessed tax system. High Earnings. S. The deduction for your losses is available only if you are eligible to itemize your. Original Print Headline: Gambling with tax problems. If you had losses greater than your gains, you wouldn’t be able to claim the. That being said, gambling losses/winnings are generally looked at very closely by the IRS. Casual/Amateur Gambler. It provides that “losses from wagering transactions” may be deducted but only up to the amount of “gains from such transactions. On the screen that follows, enter your Gambling Losses . And 2. The casino never losses and most people lose more money than they win. 4% of all individual tax returns. 24) $299. Has Anyone Been Audited Gambling Losses? Most people don’t keep records of how much they lose at gambling establishments, which can lead to IRS audits. If you open an app and it shows a ledger of $30,000 winnings, $28,000 bets wagered, Win/Loss $2000, the IRS needs the $30,000 number. For New York purposes (Form IT-196, line 20), you can claim casualty and theft losses. Gambling Losses May Be Deducted Up to the Amount of Your Winnings. ". C. I have a net win/loss statement from casino of -$70,000. 0 5,017 Reply. You can claim your losses on form 1040, schedule a,. There are many other potential audit triggers. or even do your taxes for you. In general, if you win $5,000 or more at a gambling venue, the proprietor of the venue will withhold federal taxes at the current tax rate of 24 percent. The tax attorneys at Nardone Law Group in Columbus, Ohio, routinely advise clients on tax law issues involved with gambling. 1990-M: Gambling Activities of Exempt Organizations 1996-D: Update on Gaming Activities. Your log should state the date and type of gambling activity, the name and address of the places where your gambled. Although he had substantial earnings through the years as an. Despite inexact substantiation of his losses, the Tax Court held that a taxpayer had lost more than he had won gambling during 2014, and he could take a gambling loss. While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit. The most significant IRS audit triggers point. If you itemize deductions, you can deduct your gambling losses for the year on line 27, Schedule A (Form 1040). Nonprofessional gamblers who fail to itemize deductions lose the tax benefit of. Not only do great records help you when tax time comes each year, but you’ll also have proof for your claims if you ever have to go through a tax audit. It’s spelled out right there under Topic 419 Gambling Income and Losses in guidance offered by the IRS to filers: “Gambling winnings are fully taxable and you must report the income on your tax return. Generally, a taxpayer must file a Report of Foreign Bank and Financial Accounts (FBAR) if the aggregate value of assets in foreign bank accounts exceeded $10,000 during the prior year. This includes cash and the fair market value of any item you win. Main Menu. For table games like poker or blackjack, the rate is based on how much you won. Your gambling losses, no greater than winnings, get reported on Schedule A, Itemized Deductions. Another way you. If you qualify for this method, you must manually calculate the amount of net winnings. Article continues below advertisement. The sessions approach to recordkeeping . Facts: John Coleman was a compulsive gambler who admitted that his gambling had negatively impacted his finances and his family life. Any amount up to $5,000 is taxed. (:35) How to deduct your gambling losses. However, gambling losses are typically limited to gambling income. Gambling losses are only deductible up to the amount of your gambling. So, beat the government at its own game. Absolutely, just make sure it includes all wins and losses separately and is not a combined number. The IRS also recommends keeping a personal diary of winnings and losses, including locations, dates you gambled, types of gambling activities, and people you gambled with. Part of that gambler’s net cash loss represents funds that could be used to pay tax. If you’ve lost money, you won’t owe any taxes, but you may be able to deduct your losses if you itemize. The additional taxes weren't that much compared with the potential hassle of an audit. The amount of losses that can be claimed is limited to the amount of gambling winnings reported for that year. Possible Irs audit for gambling losses claimed on tax return . This means that gambling losses are tax-deductible. Please click here to see what the IRS has to say about gambling. Frank's legal obligation does not end with the W. Failing to Report Income from Form 1099End notes: [1] 26 U. Example: John wins $23,500 during the year playing slots and other casino games. In fact, they form to be a multitude of various different factors that eventually. The gaming establishment is required to issue you a W-2G form whenever you win above certain amounts. It includes cash winnings and the fair. On the other hand, a professional gambler can deduct other expenses associated with their casino play (it's a JOB after all - ha!). You must keep accurate records that show your gambling losses. Another thing that the IRS doesn’t let you do is to net your gambling winnings and losses together. The IRS looks at gambling losses closely and requires documentation to support deductions. So, if you lost $5,000 on sports betting last year but took home $7,000 in the end, you’d be able to deduct all of those losses. 00. Usually, “proof” is not required unless there is an audit or official inquiry from the IRS or state. ” For example, if I buy an asset for $70,000, and later sell that asset for $100,000, then I. Track per Session, Not per Play. You're supposed to do this by keeping detailed. Recreational gamblers must report winnings as other income on the front page of the 1040 form. The IRS and judges get suspicious if the amount of gambling income reported by a taxpayer exactly matches the total amount of gambling income reported on Form W-2Gs. Colorado state income tax and gambling winnings. A CP2000 is not an audit. Step 1: Winnings information (Complete the following information. Home; Member Login; Club Events; Newsletters; Member Information Menu Toggle. Form W-2G is issued when gambling winnings other than those from bingo, slot machines, keno, and poker tournaments are $600 or more if the amount is at least 300 times the wager amount. 1099-MISC is Reportable Accumulative Promotional Winnings of $600 or moreThere are seven tax brackets as of 2024. Technically, if you do not have these records, the IRS can disallow your deduction. to 5 p. The requirements for reporting and withholding depend on: the type of gambling, the amount of the gambling winnings, and. If you lost $15,000 on sports betting but took home $5,000, you would only be able to deduct $5,000 of your. Therefore, if you lost $3,000 gambling, and won $1,000 of it back, only $1,000 can be deducted as a gambling loss on your tax return under Schedule A. Winnings are reported on a gross amount. The dreaded IRS audit. $600 for sports betting, horse racing and fantasy leagues. The federal tax law on online sports betting is still evolving. Tbh I would worry more about your gambling problem than the IRS at this stage. If you itemize deductions, you can offset your winnings by deducting gambling losses. Whether it's $5 or $5,000, from the track, an office pool, a casino or a gambling website, all gambling winnings must be reported on your tax return as "other income" on Schedule 1 (Form 1040). Hence, in an audit, without providing enough documentation, the agent will fail to believe you’re losing all winnings. A taxpayer may deduct losses from wagering transactions to the extent of gains from those transactions under Sec. 6662(a). By law, gambling winners must report all of their winnings on their federal income tax returns. Losses from out-of-state rental of real property. A taxpayer may deduct losses from wagering transactions to the extent of gains from those transactions under Sec. We file. If any taxes were withheld from your winnings, they will be reported in box 4 of your W-2G. Being proactive and organized can also help minimize the risk of an audit and ensure that you are prepared should one occur. Sr Financial & Tax Consultant. To measure your winnings on a particular wager, use the net gain. The IRS requires the payer to give you a W-2G if you win: $1,200 or more on bingo or slots. The IRS may take issue with itemising your losses, especially if they are sizable or entirely offset your earnings from gambling. In reality, many gamblers choose to re-wager or “recycle” their gambling winnings for future bets. Determine Your Winnings and Losses. Form 941, Employer’s QUARTERLY Federal Tax Return Form 944, Employer’s ANNUAL Federal Tax Return Form 945, Annual Return of Withheld Federal Income Tax Form 730, Monthly Tax Return for Wagers Form 11-C, Occupational Tax and Registration Return for Wagering Form W-2 G, Certain Gambling Winnings The IRS hates casino win/loss statements for two main reasons – one legal and the other practical. According to TurboTax, documents you can use to prove your gambling losses include: IRS Form W. You can’t, unfortunately, deduct losses that total more than your winnings. Possible tax audit for claiming gambling losses ! This year I filed 62,000 in gambling winnings and claimed a loss of 62,000. If you’re involved in crowdfunding, seek the guidance of your HK tax adviser to ensure your activities are properly reported on your tax return. Gambling income includes but isn’t limited to winnings from casinos, lotteries, sports betting, horse races, and raffles. So if you won $1,000 and lost $1,100, then $1,000 of your losses are deductible. You claimed a business loss for multiple years in a row. Failure to report gambling winnings, interest and dividends, non-employee compensation (1099-MISC), K-1 items, etc. An IRS audit may result from this. However, the $5,000 excess loss can’t be deducted in 2015 or carried forward. wagering losses are limited to wagering gains, a professional gambler can also deduct gambling-related expenses incurred in the business of gambling to the extent of wagering gains. You’re allowed to deduct losses on Schedule A up to the amount of your winnings. Regardless of the fact that there is no foolproof way to guarantee that the loss cannot be altogether avoided, there are some best practices out there that can help to ensure that the risk of IRS Audit is altogether minimized to a maximum level. However, it must be noted that gambling losses are only audited under situations where there are apparent red flags pertaining to the audit process itself. They’re reported on the “Other income” line on Schedule 1 of your 1040 tax return. Do Gambling Losses Trigger An Audit? Most people don’t keep records of how much they lose at gambling establishments, which can lead to IRS audits. Claim your gambling losses on Form , Schedule A as Other. Gambling Losses – The good news is that you can deduct gambling losses if you itemize your deductions. I visited the casino more than usual in 2021 and had a few good slot wins but like most had more losses when all was said and done. $1,500 or more from keno after your wager. IRS proposes new slot machine tax rules. 3079, Tax-Exempt Organizations and Gaming. Fortunately, although you must list all your winnings on your tax return, you don't have to pay tax on the full amount. Cash is not the only kind of winnings you need to report. And then depending on what other type of gambling you're doing, like, if it's slot machines, the threshold is at. . Gambling winnings historically have been reportable on page 1 of an individual taxpayer’s Form 1040, and this has not changed. Of these, 89 cases resulted in indictments,. There are two types of withholding on gambling winnings: (a) regular gambling withholding at 24% (31. In order to minimize taxes owed to the IRS for amateur/casual gamblers, you will want to do the following: Itemize deductions on Schedule A in order to take advantage of gambling losses. If an audit is not resolved, we may request extending the statute of limitations for assessment tax. For federal purposes, you can no longer claim an itemized deduction for a casualty or theft loss unless it is the result of a federally declared disaster. Whether the taxpayer is a professional or recreational gambler, gambling losses can only be. Amount of gambling winnings on u. Received over 100 W-2Gs which summed to $150,000 in gross winnings. If an individual has gambling losses that exceed their winnings, they can deduct the losses on Schedule A as a miscellaneous deduction. What is the threshold to report gambling winnings? If you win enough, you’ll have to fill out a W-2G. Claim your gambling losses as a miscellaneous deduction on Schedule A, Form 1040. Name and address or location of gambling establishment; 3. Learn more about the treatment of gambling tax and gaming losses. The IRS may be more likely to audit taxpayers who fail to report income. Facts: John Coleman was a compulsive gambler who admitted that his gambling had negatively impacted his finances and his family life. 02 billion Gambling losses cannot be greater than gambling wins for the tax year. 02 billion. Losses from out-of-state businesses, partnerships, and S corporations. [ 11 ]You have to report that. Casinos and other payers are required to report gambler winnings that exceed a certain dollar amount. Limitations on the Amount That Can Be Deducted: The amount of gambling losses that can be deducted on a tax return is limited to the amount of gambling winnings reported on the tax return. Certain behavior—or lack of it—can raise red flags for the IRS and result in an audit. Casualty losses. The likelihood of an audit is very high (since the IRS got a 1099-K for $51k that isn't showing up on your Sch C or otherwise), so be sure to cross your t's. You then report the $10,000 allowable wagering loss (equal to your winnings for the year) as an itemized deduction. Getting Ready for a Gambling Audit Kristy Maitre –Tax Specialist Center for Agricultural Law and Taxation July 7, 2016 At A Glance • Card Rooms ‐$1. This form is used to report the winnings as taxable income. 00. Yet, with other titles like Divine Fortune and Treasure Room, the action is plentiful. There are many ways to keep track of your winnings and losses when it comes to gambling for most people. Both wins and losses can affect your income tax bill. ” The diary must contain the following information: 1. Of course, for jackpot hunters, this is where Cashmio excels as it includes more than 30 jackpot games. But the higher the income reported, the higher the odds of an. My co-workers answer was yes you have it, just look harder. What Casual Gamblers Need to Know. Claiming Business Losses Year After Year. Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type. All gambling wins and losses must be claimed in the year they occur and they cannot be carried over to later years. File a return with math errors. These taxpayers were audited the least in 2019. You’re allowed to deduct losses on Schedule A up to the amount of your winnings. Your gambling losses are then reported as an itemized deduction on Line 16 of Schedule A, but this deduction is limited by the amount of winnings that has been reported as income, which means, despite having $20,000 in losses, the above individual can only report $10,000 of losses. All gambling losses are tax deductible to the limit of your winnings in a particular year. Gambling income includes, but is not limited to, winnings from lotteries. Gambling winnings statement from your online casino or sportsbook; · a printout of your online gambling activity on the. New IRS rules make attempting that an even riskier prospect while you’re filing your income taxes for 2022. First of all, the IRS has the proper legal authority to disallow the usage of most casino win/loss statements. . The $28,000 gets reported on a Schedule A under gambling losses, and only factors into your net tax liability if you itemize. When determining how much to report on your income tax return, bettors must add up the total amount of their winnings, which gives you your total gambling winnings. My guess, and it is only a guess, is that a detailed log without machine numbers would be. However, a taxpayer who wins a new car on a game show is also required to pay federal income tax on the value of the prize. Tickets. At tax time, this helps too. 41 billion • Charitable Games and Bingo ‐$2. While card pulling doesn't work as well as it used to, on games such as Ultimate X, it works really well. Gambling losses: If you are going to deduct gambling losses, you must have receipts, tickets, statements and documentation such as a diary or similar record of your losses and winnings. Your winnings. Gambling losses can only be written off for an amount of losses equal to the amount of winnings you received, so it only makes sense for certain people to maintain them. A Form W-2G must be used by gambling establishments in the certain situations in order to record your winnings: Bingo or slot machine winnings of at least $1,200. Individual Income Tax Return. [ 11 ] You have to report that. To claim these deductions, it’s important to keep accurate records of your gambling activity and follow proper reporting procedures on your tax return. The IRS will take 24% of your winnings automatically, and you will still have to report the winnings on a Form 1040 as other income. There are two types of withholding on gambling winnings: (a) regular gambling withholding at 24% (31. Facts: John Coleman was a compulsive gambler who admitted. Withholding. Can you write off gambling winnings. 9,340 satisfied customers. I’m trying to plan for best way to file my 2022 taxes and am caught up on correct way to report gambling winnings and deduct losses hypothetical round number. from our tax experts and community. For example, in Viso v. Obviously, client had tons of winnings that were not reported on W-2Gs. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. Generally, your net profit for tax purposes is the amount of your winnings minus any entry fee. But I do not see 'filing the 1099-k' in your instructions, only the gambling wins and losses. While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit. If you receive an audit letter from the IRS or State Department of Revenue on your 2022 TurboTax business return,. Blog. OVERVIEW Gambling losses are indeed tax deductible, but only to the extent of your winnings. These often turn up under the medical expenses tax deduction, charitable contribution deduction, or even gambling loss deductions. Bookmark Icon. If you itemize your deductions on Schedule A, then you may also claim your gambling losses and other gambling-activity expenses, such as travel back and forth from a casino or track. 3079, Tax-Exempt Organizations and Gaming. It includes cash winnings and the fair market value of prizes, such as cars and trips. Like all other taxable income, the IRS requires you to report prizes and winnings on your tax return, too. Our firm represents businesses through Southern California in IRS tax audits and appeals as well as Tax Court litigation. Gambling Loss: A loss resulting from games of chance or wagers on events with uncertain outcomes (gambling). To deduct gambling losses, you must itemize your deductions: Claim your gambling losses as a miscellaneous deduction not subject to. C. 7. C. IRS gambling taxes, on the other hand, are: 24% for US. The Tax Court found that a taxpayer sufficiently substantiated gambling losses of at least as much as his gambling winnings reported for the year. So, if you made $10,000 on gambling last year but lost $12,000, you can only deduct $10,000 in losses (nothing more). Illinois treats gambling losses as an unreasonable living expense. If you find. All gambling winnings are considered to be taxable income. For example, in 2019, the IRS sent out letter 6173 to some taxpayers who were exposed through the Coinbase subpoena to share detailed gain & loss calculations for the cryptocurrency gains & losses. The couple continued gambling and lost $400 from the jackpot; they left the casino that day with $1,600 in winnings. .