How to fill out Schedule A for 2022 after receiving a notice of underpayment on gambling winnings?

[bw161]

I was instructed by an IRS agent to fill out the Schedule A for 2022 to deduct my gambling losses in order to offset the taxes they are saying I owe. I am just confused on how to fill it out. I filed like normal for 2022 on time and took the standard deduction when I filed. 

[DoninGA · Accepted solution]

You will need to amend the 2022 tax return that was filed to make changes on Schedule A.

See this TurboTax support FAQ for amending a prior year tax return - https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/amend-change-correct-return-a...

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 8b. 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.

To enter, edit or delete Gambling Winnings and Losses -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Prizes, Awards, and Gambling Winnings, click the start or update button

[Opus 17]

In 2022, the standard deduction was $25,900 for married couples filing jointly, $12,950 for single taxpayers and married individuals filing separately, $19,400 for heads of households.

To deduct gambling losses against winnings, you must list all your itemized deductions, including the gambling.  Itemized deductions include unreimbursed medical expenses (over a certain threshold), mortgage interest, state and local taxes, gifts to charity, and gambling losses.  If, after listing all those items, they are still less than the standard deduction, you will use the standard deduction and get no extra benefit from anything you list, including gambling.  Or, suppose your other itemized deductions are $10,000, and you have $10,000 of sports betting losses.  Because $20,000 is more than the standard deduction of $12,950, you will use the itemized deductions, but the extra benefit of listing the gambling is $7,050, not $10,000.

If you are using Turbotax, you can prepare an amended return and you should list all the itemized deductions (there is an interview and it will ask about everything so you don't miss anything.)

Or, if the IRS only wants to see a schedule A because they have the rest of your details and just want to know what you want to claim, you can download the schedule A and the instructions here.

https://www.irs.gov/pub/irs-prior/i1040gi--2022.pdf

https://www.irs.gov/pub/irs-prior/f1040sa--2022.pdf