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How can I deduct my gambling winnings reported on a 1099-Misc form against my gambling losses?

I have seen this question posted multiple times and never directly answered.  I have a single large gambling win that was reported on a 1099-Misc form.  I have documented gambling losses much greater than this win.  I itemize my deductions on Turbotax since the itemized deductions exceed the standard deduction.  Is there anywhere in Turbotax that I can offset the 1099-Misc gambling win against my losses?  Please keep in mind the following in answering this question:

  1.  I itemize all of my deductions since they exceed the standard deduction.

  2.  The 1099-Misc gambling win is NOT a W-2G, nor will it ever be issued as a W-2G.  The 1099-Misc win can be clearly documented as a win that required gambling, not a lottery win etc.

  3.  I have all of the documentation required to report my gambling losses as well as the nature of my 1099-Misc gambling win.

  4.  Turbotax does allow gambling losses to offset gambling winnings if the gambling winnings are reported on a form W-2G  -  I already know that.  

  5.  So far, nowhere has anyone reported how to do this, or if it is possible.

  6.  Please don't repost links to IRS regulations or previous Turbotax threads - I have already read them and they do not address the issue of the infamous 1099-Misc form and where to deduct losses against that form.

 

Anyone willing to try again and avoid going down the same rabbit hole?  If it is impossible to do, I can unhappily live with that answer, but please just say so.

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How can I deduct my gambling winnings reported on a 1099-Misc form against my gambling losses?

If you report the gambling winnings in the Less Common Income section of the program you are specifically asked if you received a Form W-2G, answer You did not receive a W-2G.  The following screen askes if you received gambling winnings not on a W-2G. answer YES and enter the amount of winnings you received.  The next screen askes the amount of losses you had from gambling but not to exceed the amount of winnings, enter the amount.  Click on DONE.

 

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 8 as Other Income. 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

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4 Replies

How can I deduct my gambling winnings reported on a 1099-Misc form against my gambling losses?

If you report the gambling winnings in the Less Common Income section of the program you are specifically asked if you received a Form W-2G, answer You did not receive a W-2G.  The following screen askes if you received gambling winnings not on a W-2G. answer YES and enter the amount of winnings you received.  The next screen askes the amount of losses you had from gambling but not to exceed the amount of winnings, enter the amount.  Click on DONE.

 

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 8 as Other Income. 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

How can I deduct my gambling winnings reported on a 1099-Misc form against my gambling losses?

gambling winnings must be reported as income. Gambling losses, unless you are a professional gambler, are only deductible if reported as an itemized deduction on line 16 of schedule A. This loss is limited to the winnings reported,  any excess losses cannot be carried back or over. they are lost forever.

 

Why do they refuse to issue W-2G?

delete the 1099-MISC

on the other income form you could enter "gambling winnings on 1099-MISC" XXXXXXXX

note there is a special line on the 1099-MISC for tribal member gambling payments if that's your situation

in the jump to box type misc item and then click on the Misc Itemized Deduction worksheet. enter gambling losses on line 32

 

 

the other option is to delete the 1099-MISC and use the form W-2G. can say if either method will prevent iRS inquiry,

 

 

 

 

 

 

 

 

 

 

to me lottery winnings are a form of gambling.

How can I deduct my gambling winnings reported on a 1099-Misc form against my gambling losses?

Hi Donin,

  Thanks for your prompt response. Your method will work, but there is one big caveat. The IRS computer system will flag the fact that I have not directly reported the 1099-MISC form on my return that they received. Even though I am reporting that income elsewhere, their computer system still flagged my return. That means I will now be dealing directly with the IRS  to explain why I will am not reporting the  1099-MISC - in other words, I am now guilty until proven innocent, according to the IRS. This is not an ideal situation to be in, but maybe this is the only option I have.

How can I deduct my gambling winnings reported on a 1099-Misc form against my gambling losses?

@LMurray1 Even though you are not entering the Form 1099-MISC you are entering the income received as shown on the form.  This should not flag this for an IRS query.  Those who are self-employed do this all the time by just reporting the income shown on the Form 1099-MISC or a Form 1099-NEC as cash income for the self-employment.

 

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