Entering Gambling Losses in TurboTax

[bschnebly]

I won a cash drawing from a local casino. I have a nearly equal amount of losses from that same casino. The casino sent me a 1099-MISC for the drawing winnings, which I entered into TurboTax under the 1099-MISC category. How do I enter my gambling losses into TurboTax to offset those winnings?

I tried walking through the gambling winnings section of the income, but it didn't take me to anywhere that I could enter losses.

[Vanessa A]

 Your winnings should be reported to you on a W2-G instead of a 1099.  To enter your gambling winnings and claim the losses that go with the winnings, you can select the following:

• Income
• Less common Income
• Prizes, Awards, and Gambling Winnings
• Say No, you did not receive a W2-G, hit next
• Enter your winnings
• On the next screen enter your losses.

Since you have the 1099-Misc  You will need to make an additional entry to remove the income but still have the 1099-Misc included on your return.  

To remove the income so it is not double reported, you will go to 

• Income
• Miscellaneous Income
• Other Income not already reported on Form w-2 or Form 1099
• Select yes to Other Wages Received
• Hit continue 3 times without entering anything
• Say Yes to did you earn any other wages
• Select Other then Continue
• Enter gambling income reported on 1099-Misc instead of w2 g  
• then enter the amount of the 1099-Misc as a negative number. 

In 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

Did you receive a W2-G? 

To enter your w2-G select the following:

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

(edited 2/17/24 @ 12:50PM PST) @bschnebly 

[bschnebly]

This doesn't come close to answering the question.

I stated that I entered the winnings under the 1099 section of earnings because the casino sent me a 1099-MISC with the winning amount in the OTHER box. There was no W2-G.

I know that I have to itemize deductions to claim gambling losses, and am already itemizing because of other deductions.  What I want to know is where in the TurboTax deduction section do I enter the gambling losses? I walked through every category, and none of them asked me about gambling losses.

[Vanessa A · Accepted solution]

The reason you are not getting the option to enter your gambling winnings is because you have to enter your winnings in the gambling section.  Your winnings should be reported to you on a W2-G instead of a 1099.  To enter your gambling winnings and claim the losses that go with the winnings, you can select the following:

• Income
• Less common Income
• Prizes, Awards, and Gambling Winnings
• Say No, you did not receive a W2-G, hit next
• Enter your winnings
• On the next screen enter your losses.

Since you have the 1099-Misc  You will need to make an additional entry to remove the income but still have the 1099-Misc included on your return.  

To remove the income so it is not double reported, you will go to 

• Income
• Miscellaneous Income
• Other Income not already reported on Form w-2 or Form 1099
• Select yes to Other Wages Received
• Hit continue 3 times without entering anything
• Say Yes to did you earn any other wages
• Select Other then Continue
• Enter gambling income reported on 1099-Misc instead of w2 g  
• then enter the amount of the 1099-Misc as a negative number. 

I have also edited the original answer. 

[bschnebly]

Ok,

This is what I did.  I followed the instructions for the gambling section. I entered the amount of the prize I won, and the amount of money I lost gambling, and things worked out OK.

I tried to follow the instructions for the Miscellaneous Income section and that's where I ran into issues. The screens I get don't seem to follow the order for what you indicated in your post.

So I entered the 1099-Misc data as I received it including the positive amount of the prize, then on the next screen it tells you to enter the reason for the 1099-Misc. I typed in Prize Winnings. The next page asked, "Does one of these uncommon situations apply?" I chose "This was prize winnings". A couple of screens later it let me put in an adjustment to the value of the prize I won.  On this page I put the negative value of what I entered on the 1099-Misc page. 

Is that the correct way to do it, or will that give me problems?

[Vanessa A]

That should work as well.  As long as you are seeing a net zero amount on your 1040 form, this will work.

You can look at your schedule 1 line 1z to be sure that it has been removed from your income. 

On the menu bar on the left that shows. 

1. Select Tax Tools 
2. On the drop-down select Tools 
3. On the pop-up menu 
4. Select View Tax Summary 
5. On the left sidebar, select Preview my 1040 

[SColvin]

This does not work.  By entering the "other income" as a negative number you end up with negative in income that is rejected when you go to efile.  The backing out of the 1099Misc must have to be entered as a deduction....but where?  I spent 2 hours on the phone today with TurboTax and was then had my case referred to an Expert who was supposed to call me back.  No call.

[DawnC]

Did you receive a 1099-misc instead of a W-2G?   @SColvin   This thread is from last year, so can you clarify your situation?    You only need to negate the 1099-misc in the other reportable income section if you reported the full amount in the gambling winnings section as well as the 1099-misc section.   

Gambling losses are entered on the very next screen after you enter your gambling winnings.   All gambling winnings get entered in the same place (Less Common Income) - whether or not - they are reported on a W-2G.   

[SColvin]

I received a 1099 Misc instead of the W2g.  I entered the winnings in the gambling winnings area so that I could also enter my losses. 

[SColvin]

In addition to entering the winnings in the Gambling area I then entered the 1099Misc. I tried to back out the amount in "other income" by entering a negative amount, as per the instructions above.  That is when my efile was rejected.

[JamesG1]

Did the IRS form 1099-MISC entries both post to line 8a Other Income on Schedule 1 Additional Income and Adjustments to Income?  Or something else?

In TurboTax Online, IRS form 1099-MISC box 3 Other Income may be entered as follows: 

1. Down the left side of the screen, click Federal.
2. Down the left side of the screen, click Wages & Income.
3. Click the down arrow to the right of Other Common Income.
4. Click the right of Form 1099-MISC.
5. At the screen Did you get a 1099-MISC, click Yes.
6. At the screen Let's enter the income from your 1099-MISC, enter the information.  Click Continue.
7. At the screen Describe the reason, enter the reason.  Click Continue.
8. At the screen Do one of these uncommon situations apply, select the situation.
9. If you select None of these apply, click Continue.
10. At the screen Did the xxx involve work, select No, it didn't involve work.  Click Continue.
11. At the screen How often, select Got it in 2024.  Click Continue.
12. At the screen Did xxx involve an intent to earn money?, click No.

The income should be reported on line 8 of the IRS form 1040 and line 8z of the Schedule 1 Form 1040.

In TurboTax Online, the reversal would be entered as follows:

• Select Federal from the left side menu.
• Click on Wages & Income.
• Scroll down to Less Common Income.  Click the down arrow.
• Click to the right of Miscellaneous income….
• Click to the right of Other reportable income.
• At the screen Other Taxable Income enter a description and the income with a negative number.

The income should be reported on line 8 of the IRS form 1040 and line 8z of the Schedule 1 Form 1040.

@SColvin 

[SColvin]

Putting a negative amount in Other Reportable Income results in an error during the review.  It says:

"Wages, Salaries, & Tips Worksheet: TP other inc shouldn't be less than zero"

[SColvin]

The $ from the 1099Misc appears on line 8z of Schedule 1, the full amount.  I do not see the negative amount on schedule 1, but it appears on the Wages, Salaries & Tips Worksheet.

[SColvin]

The negative entry to offset the 1099Misc appears on the Wages, Salaries, & Tips Worksheet on line 7 and causes an error.

[JamesG1]

How was the negative entry of the 1099-MISC entered?  If the entry is removed, and a reversing entry is required, see below.  

In TurboTax Online, the reversal may be entered as follows:

• Select Federal from the left side menu.
• Click on Wages & Income.
• Click the down arrow to the right of Less Common Income.
• Click to the right of Miscellaneous income….
• Click to the right of Other reportable income.
• At the screen Other Taxable Income enter a description and the income with a negative number

The income reversal is reported on line 8 of the IRS form 1040 and line 8z of the Schedule 1 Form 1040.

@SColvin