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Gambling loss deduction isn’t working

If I enter all of my regular income, I have a refund of about $600 for federal and $650 for state.  But if I include my W2-Gs totaling $7,613 in wins, and deduct all of it on the next page,  it says I have to pay in $300 on federal and a refund of $120 on state.  So my $1,250 refund turns into owing $180.

 

That extra $7,613 in gambling wins shouldn’t affect my refund if I deduct 100% of it right?

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1 Best answer

Accepted Solutions
MinhT1
Expert Alumni

Gambling loss deduction isn’t working

No.

 

Gambling losses don't reduce your gambling winnings dollar for dollar. Gambling winnings are added to your taxable income, while gambling losses (limited to the amount of your gambling winnings) can only be claimed as an itemized deduction on Schedule A.

 

If the total of your itemized deductions including the gambling losses don't exceed your Standard Deduction (or will only increase your itemized deductions by an amount less than the losses themselves), then you don't have the full benefit of the losses on your tax, and your tax liability will increase.

 

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3 Replies
MinhT1
Expert Alumni

Gambling loss deduction isn’t working

No.

 

Gambling losses don't reduce your gambling winnings dollar for dollar. Gambling winnings are added to your taxable income, while gambling losses (limited to the amount of your gambling winnings) can only be claimed as an itemized deduction on Schedule A.

 

If the total of your itemized deductions including the gambling losses don't exceed your Standard Deduction (or will only increase your itemized deductions by an amount less than the losses themselves), then you don't have the full benefit of the losses on your tax, and your tax liability will increase.

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Gambling loss deduction isn’t working

Thanks for the information.  This is upsetting.

Gambling loss deduction isn’t working

many items in a tax return are figured using adjusted gross income. The winnings increase this but the deduction for losses on schedule A does not affect those items  

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