Proof of losses while gambling on slot machines.

[threeGGGs]

My question is if I have a spreadsheet for the year that tracks the date, place, and starting amount of money I had in my pocket, the winnings reported on W2G’s, and then at the end of the day I record what I have in my pocket is that enough proof of losses for the day.  I have no winning/loss report.

Here is my example. I start the day with $500.00 in my pocket. I play slot machines all day and win $2500.00. Taxes were taken out, for my example I had $1700.00 in cash which I use to keep playing I play more and win another $2000.00 again taxes taken out and I have $1500.00 in cash I keep playing using that money to try and win big. However, it does not happen. I use all the money up and go to the casino ATM machine and withdraw $1000.00. However, I have no luck. I stop playing with $100.00 left. So, what are my losses that I can prove. I think I can use the ATM receipt to prove a loss of $1000.00 from the ATM machine.

But what can I deduct, Knowing I only have ATM receipts as proof and my Logging Spreadsheet.  I know the $3800.00 is reported has winning so why can’t I deduct it as losses if I came home with only $100.00 left.  Any help would be appreciated. 

[Vanessa A]

My question is if I have a spreadsheet for the year that tracks the date, place, and starting amount of money I had in my pocket, the winnings reported on W2G’s, and then at the end of the day I record what I have in my pocket is that enough proof of losses for the day.  I have no winning/loss report. Yes, a spreadsheet that tracks the date, place and amount you started with, etc is enough to prove losses.

The reason you can't report that you came home with just $100 is that the IRS taxes your winnings and then you can ONLY deduct your losses if you itemize.  So, if you do not itemize, even though you spent all but $100, you can't claim the amount you spent.  

Basically, however much you win becomes your cash to spend once you collect it.  If you put it all back in after you collect it, then it is now lost.  So if you went to the casino with $1,000, won another $2,000 and then went home with $100.  You had winnings of $2,000 and a loss of $2,900.  However, since gambling winnings are only deductible up to the amount of gambling losses, you would only be able to claim a lossIn 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

To enter your w2-G select the following:

• Federal
• Income
• Prizes, Awards, and Gambling winnings under Less Common Income

[Mike9241]

From the IRS Recordkeeping

To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions for more information.

despite the above this is what the PUB says regarding playing slots

These recordkeeping suggestions are intended
as general guidelines to help you establish your
winnings and losses. They aren't all-inclusive.
Your tax liability depends on your particular facts and circumstances

Slot machines. A record of the machine number and
all winnings by date and time the machine was played. It seems winnings and losses on the same day can be netted for the same type of activity. so slot winnings and losses on a day can be netted but if play keno, that win or loss is separate.

so assuming you have the requisite data

you would figure as follows

cash start of + cash put in  say 1500

net winnings on days when there are net wins  say 6000, total so far 7500

taxes taken out 2000 net so far 5500

cash at the end 100 losses 5400 on days with net losses

put another way your losses came from the following 

net cash out                               1400

wins net of withholding           4000

losses                                         5400 

[threeGGGs]

Thanks for the Information. I have all the data but not the slot machine number. Would that be an issue? Actually, one Casino looks like they added the slot machine number but one other casino did not on the W2-Gs.

[threeGGGs]

Thanks, All the winnings had W2-Gs and Federal taxes taken out so I'm good with the winnings. It's all reported and I have input those into turbotax. I will look at the losses and with additional medical items  see if it's enough to itemize. Thanks.

[Hyperma]

It sounds like you've been diligently keeping track of your gambling activities, which is great for tax purposes. While I'm not a tax expert, generally, the IRS requires documentation to support your gambling losses if you want to deduct them from your taxes.

[Lennatave]

Your spreadsheet detailing your wins and losses for the day, along with ATM receipts showing withdrawals, can be helpful in demonstrating your gambling activity. However, the IRS may also require additional documentation, such as casino records or statements, to substantiate your losses.
If you're looking for more information on gambling and taxes, you might find this resource at https://pafipdkaltara.org/ helpful. Best of luck with your tax filings!