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Level 1
January 21, 2024
Question

Why does my returnshow a2000 dollar gambling earnings when I had 2000 dollars in gambling losses?

  • January 21, 2024
  • 2 replies
  • 7 views
I already entered my winnings and losses but at the end my winnings were added to my total income which increased my taxable income

2 replies

DoninGA
Level 15
Level 15
January 21, 2024

Gambling losses can only be deducted up to the amount of the gambling winnings.
Gambling winnings are reported on Form 1040 Schedule 1 on Line 8 as Other Income. The amount from Part I of Schedule 1 Line 10 flows to Form 1040 Line 8.


Gambling Losses are reported on Form 1040 Schedule A as a Other Itemized Deductions. Gambling losses are not a one-for-one reduction in winnings. Your total itemized deductions reported on Form 1040 Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

 

Standard deductions for 2023

Single - $13,850 add $1,850 if age 65 or older
Married Filing Separately - $13,850 add $1,500 if age 65 or older
Married Filing Jointly - $27,700 add $1,500 for each spouse age 65 or older
Head of Household - $20,800 add $1,850 if age 65 or older

Hal_Al
Level 15
Level 15
January 21, 2024

Q. Why does my return show a 2000 dollar gambling earnings when I had 2000 dollars in gambling losses?

 

Note: this answer is the same as the other reply, just in different words. 

A. Your gambling winnings are reported as income, on your tax return. You do not get to subtract your gambling losses, before reporting your winnings.  Instead, you are allowed to take a separate deduction for your losses (but not more than you won).  This deduction is only allowed as an "itemized deduction".  For most people, the net effect, there is no deduction, because they normally use the standard deduction and their losses aren't enough to make taking the standard deduction more attractive.  $2000 of additional itemized deductions isn't usually enough to make a difference.