J--Griss
New Member

Do scratch off losses count as gambling losses?

I like to play scratch offs and recently learned gambling losses can be deducted as much as winnings. I was wondering if scratch offs count because they are a lottery and how much information would the IRS need to accept them, because you can only buy them with cash.
MargaretL
Expert Alumni

Deductions & credits

Yes, scratch off tickets can count as gambling losses - but there is a catch.  First, you cannot deduct them without claiming any winnings.  For tax purposes, you can only deduct losses up to the amount of your winnings. Secondly, they are part of your itemized deductions. If you don't claim any mortgage interest, real estate taxes, state income tax, charitable, medical expenses etc., gambling losses will not impact your tax return at all.

As to the information needed - you would have to have receipts for the tickets purchased, since they are purchased by cash only. 

View solution in original post

J--Griss
New Member

Deductions & credits

Would holding on to the loosing tickets also count instead of a receipt?
MargaretL
Expert Alumni

Deductions & credits

No, because they don't show payment, unfortunately.

Deductions & credits

How in the world can you show loss? No one gives you a receipt for purchasing a scratch off ticket.  I have the loosing tickets and of course I had to buy them before they became a losing ticket?
eerised74
New Member

Deductions & credits

I agree, you don't get receipts for losing tickets, you just purchase them
Jdinieri
New Member

Deductions & credits

When you buy from a clerk, you can request a receipt, but if you buy from the machine, I don't know how you can get a receipt, unless it let's you use your debit card. Then you can get a receipt emailed to you or something like your statement will show it.

Deductions & credits

This is not correct: "gambling losses can be deducted as much as winnings."  

 

You can enter your winnings, and then keep clicking through the interview to enter gambling losses.

 

https://www.irs.gov/help/ita/how-do-i-claim-my-gambling-winnings-and-or-losses

 

Losses are an itemized deduction.  If you do not have enough itemized deductions to exceed your standard deduction, your losses will have no effect.

https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/

 

https://ttlc.intuit.com/questions/1900352-can-i-deduct-my-gambling-losses

 

STANDARD DEDUCTION

Many taxpayers are surprised this year because their itemized deductions are not having the same effect as they did on past tax returns.  The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

 

Your standard deduction lowers your taxable income.  It is not a refund 

2018 Standard Deductions:

Single   $12,000  (+ $1600 65 or older)

Married Filing Separately    $12,000  (+ $1300 65 or older)

Married Filing Jointly  $24,000  (+ $1300 each spouse 65 or older)

Head of Household  $18,000  (+ $1600 65 or older)

Look at line 8 of your Form 1040 to see your standard or itemized deductions.

 

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Nomad1c
New Member

Deductions & credits

The use in winning tickets themselves can be used as the receipts. I keep all if mine and use them against claimed winnings each year...dollar for dollar.

Nomad1c
New Member

Deductions & credits

Yes. The ticket itself counts as a receipt

 

Nomad1c
New Member

Deductions & credits

Wrong answer. Having them verifies a purchase was made. And also each ticket show what the amount paid...was.

Deductions & credits


@Nomad1c wrote:

Wrong answer. Having them verifies a purchase was made. And also each ticket show what the amount paid...was.


They could be gifts, in which case you can't deduct the cost.

 

The bottom line is that the Tax Code assumes all income is taxable, and if audited, you must prove every deduction to the satisfaction of the auditor.  The auditor does not have to prove you are wrong; you must prove you are right.  (In this, Tax law is opposite of most every other legal situation.)  An auditor in a bad mood does not have to allow a deduction without proof.  So how much proof to keep and how much risk to take is up to each taxpayer.