Assuming the income is from winnings you can report the winnings and losses as shown below.
If the Form 1099-MISC has an amount in box 3 you can use the steps below without entering the Form 1099-MISC itself. Winnings shouldn't be reported on this document.
To report your gambling winnings and losses you can use the steps below.
Gambling winnings are reported by following the steps below.
Gambling winnings are taxable income and any gambling losses to the extent of the amount of winnings is deductible as an itemized deduction under miscellaneous expense (not limited by a percentage of income) if this works for you .
Attached is a checklist of other itemized deductions so that you take full advantage of this.
If services were performed then income would be reported on Form 1099-MISC in box 7, as nonemployee compensation. This would be considered self employment income. You can add a comment if this applies to you.
I am a new AARP tax aide and we just ran into this issue on our first day. A gambler was selected at random to win a $25,000 truck. The casino put that on a 1099-Misc, but some tax preparers say you can deduct losses against that $25,000 and some say you cannot. I would be curious to see if anyone can show evidence to support one of those stances. Pvaroz, what did you win that was put on a 1099-misc?
Even though the gambling winnings were reported on form 1099-Misc you can only deduct gambling losses as an itemized deduction.
If you do not have enough in mortgage interest, property taxes, state income taxes paid, charitable contributions, medical expenses that exceed 7.5% of your income to be greater than the standard deduction you will just take the standard deduction.
I understand about the standard deduction and being able to itemize, but it this case there was a prize of a $25,000 truck as a prize and over $25,000 in losses at table games. So with other items, they were well over the standard deduction. The question is if the truck that was won without placing a wager or buying a raffle ticket counts as gambling winnings since it was won in the casino. Is that considered a sweepstakes win and allowed to have losses written off against it? In order to win the truck, you had to have a players card.
Yes, the truck would be winnings and you can use the losses from the table games an an itemized deduction to reduce the tax owed.
Thank you for the reply. The confusion was caused by the truck value being reported on a 1099-misc. Is there a reason they don't put in on a W2G?
Also, is there something in Pub 17 or any IRS document that covers this issue ?
"Gambling income includes but isn't limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips."
Thank you, that will help a lot. My only remaining question was why the casino would not put a prize on a W2G? But then I found this on the 1099 instructions that covers winning something without a wager.
Box 3. Other Income: Enter other income of $600 or more required to be reported on Form 1099-MISC that is not reportable in one of the other boxes on the form. Also enter in box 3 prizes and awards that are not for services performed. Include the fair market value (FMV) of merchandise won on game shows. Also include amounts paid to a winner of a sweepstakes not involving a wager. If a wager is made, report the winnings on Form W-2G.
Thank you for your help,
Steve
I have the same situation, but if I don’t add the 1099misc I can’t enter the social security and Medicare they took out. If I do add the 1099misc, then the amount is in gross income.
Yes, thank you for your comment on this gray area that I am wrestling with. I have heard this stated both ways and am in urgent need of filing 2019 taxes witha note from the IRS saying they are going to send me a bill. I had about 11 grand in separate payments for winnings over 1200 which happened 4 times and were jackpots, in which I insisted the Indian gaming Casino take some out so I wouldn’t run into this situation. An additional 5000 was reported as Misc. and put me into about a $1000 tax bill. I am 72 and obviously was suckered pretty badly, my win loss statements add up to a near -70000 and I have beenwaiting for documents reporting these wins, The casino gave me a bunch of papers saying not for tax use that showed winnings of freeplay, cash , a blanket, totallling 5000 reported as 1099 misc. They were won with players cards which require one to have a card inserted and actively gambling…called hot seat drawings with wagers. I have been at wits end trying to find a way to report this correctly and legally. The tax person who itemized my return left mewith a 1000 dollar tax bill and a 500 dollar tax prep bill. She didn’t even think that my losses could be mitigated with the huge amount of loss and did it as easy for her as she could. I said this is a write off you are ignoring to make it easy on yourself and didnt even think to itemize. Well I have done it with past tax software ( not turbo) but the software doesn't see the gray areas. My last try using another companies lousy software was just wrong but itemizing can help me with these costs if it can be entered correctly and it is reporting a 100 refund, but the summary I got was reporting pensions as W-2 earnings and is questionable. This is driving me to the poor house…and I put a ban on my gambling voluntarily. Please make me believe that if I buy your software this can fly thru the IRS’s nitpicking rules and you will make me a believer in TurboTax. please respond they are threatening to bill me for this and I need help I can believe in. Thanks
@proofed49 You are talking about"itemizing" to offset your losses. Do you have enough other itemized deductions like mortgage interest, property tax, etc. that would add up to enough to exceed your standard deduction? If you do not ---then itemizing does not help you. Gambling losses are an itemized deduction and they have no effect at all unless you have enough total itemized deductions to exceed your standard deduction.
Your standard deduction lowers your taxable income. It is not a refund.
2019 Standard Deduction Amounts
Single $12,200 (+ $1650 65 or older)
Married Filing Separate $12,200 (+ $1300 if 65 or older)
Married Filing Jointly $24,400 (+ $1300 for each spouse 65 or older)
Head of Household $18,350 (+ $1650 for 65 or older)
Look on line 9 of your 2019 Form 1040 to see your itemized/standard deduction amount
You will see your standard or itemized deduction amount on line 12 of your 2020 Form 1040.
2020 Standard Deduction Amounts
Single $12,400 (+ $1650 65 or older)
Married Filing Separate $12,400 (+ $1300 if 65 or older)
Married Filing Jointly $24,800 (+ $1300 for each spouse 65 or older)
Head of Household $18,650 (+ $1650 for 65 or older)
Gambling
To enter the W-2G or other documents
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/
https://ttlc.intuit.com/questions/1900352-can-i-deduct-my-gambling-losses
Thanks for your input, I had this done once by a so called professional tax office, but she used the easy way of no itemizing substantial documented losses. She mentioned that I could claim anything I want, hinting that what I am trying to accomplish is route what were gambling winnings the casino wrongly reported as Misc income and gave me no idea what that was. They gave me documents that clearly stated not to be used for txes printed on them. They consisted of awards of various free play promos that I had won at different times by sittle at slot machines and being eligible Only by playing or wagering money so I could be randomly electronically chosen for free play and possible real money, in a few instances. The misc income statement was wrongly classified as Misc income. I have not had much luck getting them to address this in a way that doesnt say they are wrong to report this in this way. The distinction is was money wagered and indeed it was by slot play making me eligible to win a number of promos that sucked me into play. To answer if I hadenough to itemize in 2019 it is a resounding yes .Win loss at that Casino estimates a negative 60,000 $ and winnings were roughly 12,000 in 4 jackpots at other Casinos plus the Misc inc. of an additional 5000, so approx 19000 plus medical deductions of 2000 and state taxe deductions of 1000 etc. I have further docs for other losses that negate any so-called Wins and need the 5000 they are claiming as Misc Inc to be properly called what it is So I do not have to pay the IRS on $ that was wagering wins. It is at least 1400 dollars vs a return of withholding of approx$ 400 I made them deduct. This is a gray area that the I rS needs to rule on fairly so I can put this to rest. I am sorry that these details are having to be written about and am committing more cash outlays for tax prep and advice in an effort to not loseanymore to these casinos andhave vowed to not let myself be exploited further by their adding insult to injury, as I have taken a voluntary ban to resolve my issues and excesses.. Thanks for your assistance help me address these issues so I can pull myself out of this morass I am stuck in and not be a fool to be manipulated.
I have same issue with winning a drawing for $1,250 1099misc. Plenty of W2G's and losses to use deductions but I don't know where to put the 1099misc casino prize so that I can increase my loss deductions to reduce the tax on the 1099misc.
Does anyone know specific IRS ruling re 1099 prizes and deductions?
Regardless of which form the winnings are reported, you can only deduct up to the winnings and you have to itemize to take the deduction.
Here is a link to Topic No. 419 Gambling Income and Losses.
To simplify my question: Can I just add the 1099misc (from a casino lottery drawing) into line 8c Schdl 1 for gambling income?
If I must show the1099misc on line 8z Schdl 1 then the casino loss deductions get limited by the smaller total W2G's on line 8c.
My W2G winnings justify itemizing this year. Your comment that one cannot deduct more losses than winnings is rudimentary common sense. That aspect is the first thing IRS (or anyone) talks about.
You are correct in that your gambling winnings will go on line 8b of Schedule 1. However, losses are not directly entered into Schedule 1, which is for income.
To report gambling losses, you must itemize your income tax deductions on Schedule A. You would typically itemize deductions if your gambling losses plus all other itemized expenses are greater than the standard deduction for your filing status. In 2021 the standard deduction for filing single is $$12,550 and married filing jointly is $25,100. If you claim the standard deduction,
You will be prompted to enter losses in the W2-G section. It will then show on Line 32 of the Schedule A Miscellaneous Itemized Deductions Worksheet.
Your reply is confusing. The topic at hand is deductions for gambling losses but then you injected a nonsequiter paragraph that turned your whole reply into nonsense. The following bold and Iitalicized part needs to be removed from your answer:
" ... .. To report gambling losses, you must itemize your income tax deductions on Schedule A. You would typically itemize deductions if your gambling losses plus all other itemized expenses are greater than the standard deduction for your filing status. (The following is a _seperate_ _paragraph_ for a different discussion): "In 2021 the standard deduction for filing single is $$12,550 and married filing jointly is $25,100. If you claim the standard deduction,
You are still obligated to report and pay tax on all winnings you earn during the year.
You will not be able to deduct any of your losses."
No it is right. You have to itemize deductions on schedule A to deduct the losses. But since the Standard Deduction is now a lot higher and more deductions are limited, more people will take the Standard Deduction instead of itemizing which means you can't deduct the gambling losses.
For 2021 the standard deduction amounts are:
Single 12,550 + 1,700 for 65 and over or blind (14,250)
HOH 18,800 + 1,700 for 65 and over or blind (20,500)
Joint 25,100 + 1,350 for each 65 and over or blind (26,450/27,800)
Married filing Separate 12,550 + 1,350 for 65 and over or blind (13,900)
I'm confused too. I don't want to know about a standard deduction. I was wondering if you can add the 1099 Misc in the same aa other gambling income.
Bundle the W2g's and 1099 Misc together or if there will be a problem.
The reason is because while itemizing I can't seem to find how to itemize gambling losses on the 1099 Misc section.
It's treating it like a business and it's not a business. It's a gambling prize.
Bundle the casinos' 1099 misc into the same line with the W2Gs and then include the maximum losses from your win/loss statement. Your maiming losses are automatically capped by your reported winnings.
The reason is that You could not have those 1099misc wins at the casino if you weren't there also giving up those losses.
Yes, your 1099-Misc for gambling winnings is reported as 'Other Income' on your tax return.
To report your gambling losses, you must itemize your income tax deductions on Schedule A. You would typically itemize deductions if your gambling losses plus all other itemized expenses are greater than the standard deduction for your filing status. If you claim the standard deduction,
Click this link for more info on Gambling Losses.
@Str8upbrah
I am unable to see the attached picture showing how this looks. I also have a gambling winning that was reported on a 1099 Misc instead of W2G so I wanted to see how this looks so I can bypass the 1099 misc form and can then put my losses towards this?
I just don't want to get in trouble with the IRS so want to make sure I do enter it properly. Thanks!