Reporting Gambling Income - Session Method

[dhuber24]

Is TurboTax planning to add the capability of reporting gambling activity using the Session Method of tracking/reporting wins and losses? I can't imagine I am the only tax-payer in the United States who files with TurboTax and elects to use the Session Method for reporting gambling activity?

Is there a way to create a product enhancement request to vote on? @support 

[DawnC]

You can use the session method and enter your manually calculated session totals into TurboTax.    

Instead of entering every W-2G exactly as written, enter your Total Net Winnings from all "winning sessions" as a single entry.

In TurboTax, all W-2G income is entered with Other gambling income (not on a W-2G) and then the losses are entered on the very next screen.  

• Comprehensive Record-Keeping: You must maintain a precise, contemporaneous diary or similar record of all wins and losses.
• Supporting Documentation: You must be able to provide tickets, receipts, casino statements, or other proof.
• Limitation: While this "session" approach can help determine your daily net, overall for the year, you can only deduct losses up to the amount of your total reported gambling winnings, and you must itemize deductions on Schedule A (Form 1040).

Topic 419 - Gambling winnings and losses  -  

[dhuber24]

That is exactly how I entered it in TurboTax, and within each state return (for states that don't allow netting losing sessions with winning sessions) which I have a W2G, I allocated a portion of the total winning sessions for each state.

I also have a detailed session log in a spreadsheet, as well as ATM receipts proving my starting cash in each session. So I have all of the required documentation and proof, per IRS guidelines.

The problem is that TurboTax does not allow me to attach the session logs to my return and declare that I am using the session method. This is an extremely important part of the reporting, since I won't be reporting the total W2G amounts I won over the course of the year. As a result, I am likely to get audited when they see I am reporting much smaller total session wins than what my total W2G's sum up to. 

I want TurboTax to create a function that allows me to attach documentation of my session logs, and also have the ability to declare in my return that I am reporting gambling activity using the session method.

[AmeliesUncle]

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@dhuber24 wrote:

I want TurboTax to create a function that allows me to attach documentation of my session logs,

and also have the ability to declare in my return that I am reporting gambling activity using the session method.

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The IRS does not look at any attached supporting documentation for anything.  Just keep it in case the IRS asks about it.

The IRS does not provide a direct mechanism to do that.  However, because your Session wins are less than your W-2Gs, there is a work around.  You can report your W-2Gs, so the IRS sees that.  Then you should be able to enter "Other Income" (it shows up on line 8z of Schedule 1) as a negative number and call it something like "Gambling Session Adjustment" so the combination of the W-2Gs and the negative "Other Income" totals the proper amount of Session winnings.