Yes, you would still have to include the winnings as income because when they entered your account you were able to withdraw them or re-bet them. Once you have control over the money, then you choose what to do with it.
Gambling winnings are taxable income.
In order to claim gambling losses, you must itemize your return. So even if you left it ride in your account and then lost it all betting it again, you would need to include the winnings as income and then itemize your return to claim any of the losses.
Other Itemized expenses include mortgage interest, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss. Your health insurance and all medical expenses are only deductible for the amount that is over 7.5% of your AGI. This means if your AGI is $50,000, then the amount that is over $3,750 is deductible.
Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your insurance premium payments.
The 2023 Standard Deductions are as follows:
- Married Filing Joint (MFJ) $27,700
- Married Filing Separate (MFS) $13,850
- Head of Household (HOH) $20,800
- Single $13,850
Blind and MFJ or MFS add $1,500
Single or HOH if blind add $1,850
Did you receive a W2-G?
To enter your w2-G select the following:
- Federal
- Income
- Prizes, Awards, and Gambling Winnings under Less Common Income
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