Professional gambler. Filing Sch C. Do I enter W2G's AND deduct losses when asked? Then also enter the offsetting entry as "other income' on Form 1040, Line 21?

[Hal_Al]

No. If you are filing Schedule C, you do not enter the W-2Gs at the W-2G screen. Enter at Business Income. You will not get the offsetting entry box. The W-2G screen is not for professional gamblers. Losses will be entered as business expenses. There is no category on Schedule C; so enter losses as other expenses.

Wagering losses still cannot exceed gambling winnings. Any excess gambling losses over gambling winnings cannot be carried forward or carried back to offset gambling winnings from other tax years.

Reference:

https://www.taxsamaritan.com/tax-preparation-services/gambler-tax-preparation/

[hseing]

What will it happen when the IRS discover that the W2G was not reported since it’s reported under Business Income? How does the IRS know that the amount in the Business Income belong to  i.e. is the W2G amount? Anything is linked between the expenses amount and W2G so that the IRS won’t question about not reporting the W2G amount? Thanks for your help.

[DoninGA]

@hseing Already answered here - https://ttlc.intuit.com/community/taxes/discussion/re-schedule-c-for-gambling-income-where-to-show-l...

[oldmandef]

What if we are filing Sch C professional gambler but also received a W2G in which taxes were withheld?  Do we put those withholdings under "other federal/state withholdings" since we are only filing sch C winnings (income) and losses (expenses)?  Or is there a better method? 

[AliciaP1]

Yes, that would be the best way to handle those withholdings and report all income appropriately.

@oldmandef

[oldmandef]

Thanks @AliciaP1 .  My state form is giving me an error doing it this way, but if I put the W2Gs in the W2 area then put the total losses as expenses on schedule C it works.  However doing it this way I won't have any income on schedule C though, do you think that's OK in this case to show the income on the W2G area and losses on schedule C as expenses?  

[ErnieS0]

Entering gambling income as W-2Gs and claiming expenses on Schedule C with $0 income will not work.

Entering the W-2Gs says to the IRS that this income is not from self-employment and that you are claiming self-employment expenses with no income. As Tax Champ @DoninGA says, the W-2Gs should be entered as business income.

Check were you entered your state withholding.

1. Type estimated tax payments in Search
2. Select Jump to estimated tax payments
3. Scroll down to Other Income Taxes Paid in 2021
4. Start/Revisit Withholding not already entered on a W-2 or 1099

You will not be able to e-file.

[oldmandef]

Thanks @ErnieS0 that was the error I was getting on the state return.  It is letting me e-file the federal return though does that make sense?  I can e-file federal with "other withholdings" but not state with "other state withholdings"? 

[ErnieS0]

Every state has different rule, but that does make sense @oldmandef. Some states want copies of documents with state withholding, which is probably why you are not able to e-file state.

TurboTax allows you to e-file federal and mail your state return. I recommend that route.

[PokerFan]

By filing Sch C and putting my winnings as income and my losses as expenses, I will not have entered any of the W2G papers given to me by the casinos/venues. Should those have been entered somewhere? 

[Cynthiad66]

Here's where you enter Form W-2G (Certain Gambling Winnings) in TurboTax:

1. Open or continue your return in TurboTax, if you aren't already in it
2. Search for W2G (don't include any hyphens) and select the Jump to link in the search results
3. Answer Yes on the Did you win money or other prizes in 2022? screen and follow the instructions to enter your W-2G

After you've finished entering all of your gambling winnings, we'll ask about any losses you may have had. Losses can be deducted up to the amount you reported winning, but only if you itemize.

If you regularly pursue gambling with the intention of making a profit, then it’s effectively your day-to-day job. Rather than claiming your winnings as “other income” on your Form 1040, you can file Schedule C as a self-employed individual.

Wagering losses still cannot exceed gambling winnings. Any excess gambling losses over gambling winnings cannot be carried forward or carried back to offset gambling winnings from other tax years.

IRS:  Specific Instructions for W-2G Gambling Winnings

@PokerFan

[PokerFan]

I am filing Schedule C as a Professional Poker tournament player. When I do that I never enter the W2G papers given to me by Casinos when I Won more than 5K. Is this correct? Will that be an issue that I am not technically reporting/entering  the W2Gs anywhere when I file through Schedule C. The income for my Schedule C is great than all the W2Gs combined and includes those numbers plus all my smaller cashes.

[DMarkM1]

Yes, you are correct.  As a professional gambler you enter your winnings as business income on Schedule C not through the "Gambling Winnings" reported on form W2G topic in "Less Common Income."  Technically you are entering the W2G income; just not specifically identified as W2G reported.  Bottom line:  As long as the income is reported you'll be good.