You must report the gambling winnings and losses separately. You cannot net the two. Enter the W2-G information exactly as it appears on the form.
To report the income, follow these steps:
- Under the Federal menu, choose Wages & Income
- Expand the menu for Less Common Income
- Click Start/Revisit next to Gambling Winnings
- Answer YES to Did you win money or prizes from gambling or lotteries during 2019?
- Click the button next to I want to work on W-2G. Click Continue.
- Enter the information from the W-2G in the screen that follows. Any withholding will be reported in box 4 and included in your payments on your return.
- On the screen that follows, enter your Gambling Losses
The amount of gambling losses you can deduct can never exceed the winnings you report as income. For example, if you have $5,000 in winnings but $8,000 in losses, your deduction is limited to $5,000. You could not write off the remaining $3,000, or carry it forward to future years.
To report your gambling losses, you must itemize your income tax deductions on Schedule A. You would typically itemize deductions if your gambling losses plus all other itemized expenses are greater than the standard deduction for your filing status. If you claim the standard deduction,
- You are still obligated to report and pay tax on all winnings you earn during the year.
- You will not be able to deduct any of your losses.
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