Gambling Winnings vs Losses W-2

[Matt42029]

Hi,

So I have a friend who won $20,000 through the state lottery. When they won 31% was immediately taken out and they were given a check for the remainder. My friend however has gambling losses within that year that meet the winnings (or close to it) and has won/loss statements from casinos to show it. Since the $6,000 was already taken out for taxes is there any way to get a portion of that back when filing taxes considering my friend lost more than they won in that year and can show it?

[VolvoGirl]

The 6,000 was tax withholding like from your paychecks.  You will enter the full gross amount as income then the withholding is subtracted from the tax.

I'm not sure about the losses.  They might be one of the deductions that are suspended.  See Deductions that have been suspended for 2018

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

FAQ on 2018 changes https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return

And the losses are an Itemized Deduction.  Many people will be taking the Standard Deduction now.  So will he have enough to Itemize?  

For 2018 the standard deduction amounts are:

Single 12,000 + 1,600 for 65 and over or blind

HOH 18,000 + 1,600 for 65 and over or blind

Joint 24,000+ 1,300 for each 65 and over or blind

Married filing Separate 12,000 + 1,300 for 65 and over or blind

[VolvoGirl]

Found the FAQ.  Yes you can deduct losses if you Itemize Deductions 

https://ttlc.intuit.com/community/credits-and-deductions/help/can-i-deduct-my-gambling-losses/00/258...

[Matt42029]

His income otherwise is less than $5,000. So i’m not sure which would be best. But assuming a $5,000 regular income, plus the $20,000 win minus the $6,000 paid in taxes. Would anything be able to come back to him when filing? His gambling losses are about $6,000.

[VolvoGirl]

Is he Single?  His adjusted gross income will be 25,000.  Minus the Standard Deduction of 12,000 leaves 13,000 taxable income.  Tax on 13,000 is $1,373 less any credits he qualifies for like the EIC.   So he would get the difference of 1,373-6,000 back.