Gambling losses are indeed tax deductible, but only to the extent of your winnings and requires you to report all the money you win as taxable income on your return. The deduction is only available if you itemize your deductions. If you claim the standard deduction, then you can't reduce your tax by your gambling losses.
The IRS requires you to keep a log of your winnings and losses as a prerequisite to deducting losses from your winnings. Your winnings include each win during the year.
Your records need to include:
- the date and type of gambling you engage in
- the name and address of the places where you gamble
- the people you gambled with
- the amount you win and lose
Other documentation to prove your losses can include:
- Form W-2G
- Form 5754
- wagering tickets
- canceled checks or credit records
- receipts from the gambling facility
Enter Form W-2G (Certain Gambling Winnings) in TurboTax:
- Open your return.
- Enter w2g (don't include any hyphens) in the Search box.
- Click on Jump to w2g link in the search results. (Even if you didn't receive a W-2G.)
- Answer Yes on the Did you win money or other prizes in 2023? screen and follow the instructions to enter your W-2G. or
- Enter that you Didn't receive a W-2G on the next screen and proceed through the interview.
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.
This entry(ies) will show up on Line 8b of Schedule 1, and then carry forward to Line 8 of 1040 or 1040SR.
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