No, you cannot just add up the winnings and divide by 2. You should have been issued W2Gs from the casino or lottery where you won. Each W2G has a social security number and name. You must enter the W2Gs on that person's return.
No, you do not just subtract the losses from your AGI. The information below is the steps and processes for reporting the gambling winnings and losses.
NOTE: You can't just deduct your losses without reporting any winnings. You need to first owe tax on winnings before a loss deduction is available.
- Go to the Federal Taxes tab ( Personal Tab in Self-Employed)
- Click Wages & Income
- Select I'll choose what I work on
- Then go to Less Common Income
- Click Gambling winnings
- Once you have entered your gambling winnings click on Continue.
- Once you finish the questions for this area you will then be able to enter your gambling losses.
NOTE: WITH A FILING STATUS OF MFS IF ONE OF YOU ITEMIZES, THEN BOTH OF YOU MUST ITEMIZE. If the losses are less than the standard deduction, you will not be able to claim the loss unless one of you can itemize, then the other will have to itemize, and will only get a deduction for the amount of the loss. Also, if all you have on the Schedule A is the gambling losses and the state and local taxes which are automatically calculated, you will still have a higher taxable income. You will not pay tax on the gambling winnings but will pay tax on the entire amount of your other income less any credits and your state and local taxes reported on Schedule A.
ALSO, YOU CAN ONLY CLAIM LOSSES UP TO THE AMOUNT OF YOUR WINNINGS.
