- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
Gambling winnings are reported on page one of your return as miscellaneous income. Once gambling winnings are entered, the next screen asks about Gambling losses. Gambling losses are deductible but the program follows the statute and limits them to gambling winnings. They are an itemized deduction, so if you don't itemize you could be taxed on the winnings without an offsetting deduction.
Gambling losses are deductible as an itemized deduction, but only if you itemize, and only to the extent of any gains. They are one of the few deductions not subject to the 2% limit that other miscellaneous itemized deductions are subject to. Still, if your standard deduction is greater than your itemized deduction, there is no benefit to claiming the gambling losses. Gambling income is reported under the Federal Taxes / Wages and Income tab. It is the last category listed. Once entered, you will be asked about gambling losses.
Some states either don't allow a deduction for gambling losses or don't allow itemized deductions. The result in those states is that for state tax purposes, you are taxed on gambling gains without any offset for losses. Those states include:
- Connecticut*
- Illinois*
- Kansas
- Indiana*
- Louisiana (Itemized Deduction Limitation)
- Massachusetts*
- Michigan*
- Minnesota (State AMT — Impacts Amateurs)
- Mississippi (allows a deduction only for losses in Mississippi)
- New Hampshire (10% Gambling Tax)
- New York (Itemized Deduction Limitation)
- Ohio
- West Virginia*
- Wisconsin*