I put in the $13,000 in losses but TurboTax is still reducing my Federal and CA State refund. It should zero out, correct?
not correct.
gambling winnings are fully taxable and reported on Schedule 1 (federal 1040). Losses and expenses are only deductible to the extent of winnings and only if you itemize your deductions on schedule A. if you don't itemize, the losses have no tax effect. itemization only makes sense if it exceeds your standard deduction Turbotax optimizes between the two so apparently your standard deduction is more than your itemized deductions
Yes, I am itemizing. TurboTax even suggested the itemization. I think the program has a problem. Since, if I remove the W2G items, my refund goes up thousands.
Gamblers like to think their losses will cancel out the winnings ---it does not work that way. And of course your refund went up when you removed all of that taxable income by taking the W-2G's off. But ask yourself how the IRS will react to that---since those W-2G's went to the IRS with your SSN on them.
Gambling
To enter the W-2G or other documents For your Gambling winnings--Go to Federal>Wages & Income>Less Common Income>Gambling Winnings
You can enter your winnings, and then keep clicking through the interview to enter gambling losses.
https://www.irs.gov/help/ita/how-do-i-claim-my-gambling-winnings-and-or-losses
Gambling winnings are taxable income. Losses are an itemized deduction. If you do not have enough itemized deductions to exceed your standard deduction, your losses will have no effect.
https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/
2024 STANDARD DEDUCTION AMOUNTS
SINGLE $14,600 (65 or older/legally blind + $1950)
MARRIED FILING SEPARATELY $14,600 (65 or older/legally blind + $1550)
MARRIED FILING JOINTLY $29,200 (65 or older/legally blind + $1550)
HEAD OF HOUSEHOLD $21,900 (65 or older/legally blind + $1950)