W2g gambling income is reported as income, I have documentation to offset the the gambling income with gambling losses how can I have Turbotax use the loss?

[DanielV01 · Accepted solution]

It depends.  Gambling losses are included in itemized deductions.  Many changes have been made to itemized deductions this year.  While claiming gambling losses up to the amount of gambling winnings is still allowed, it is very possible and even likely that you may not see the gambling winnings truly offset because of reporting the losses.  The standard deduction was raised this past year from 6350 for a single individual, 9350 for a household head and 12700 for a married couple filing jointly (2017 numbers) to 12000 for a single individual, 18000 for a household head and 24000 for a married couple filing jointly in 2018.  In addition, some other deductions were reduced or eliminated.

You can enter the gambling losses right after you enter the gambling winnings.  Also, make sure you enter in all of your other Itemized deductions (home mortgage interest, real estate taxes, etc).  However, if you don't see a significant change in your tax amount due or refund, the explanation above is the reason why.  Tax law change reduced the amount of gambling loss deduction that could lower your taxable income this year.  (But the gambling winnings still must be reported).

[DEANOS]

When a taxpayer does not have the advantage of itemizing due to insufficient deductions, he should still be able to deduct his losses. Gambling winnings should not be counted as income when his losses exceed his winnings. There is obviously a glitch in Turbo tax or in the IRS stipulation. 

[xmasbaby0]

@DEANOS 

Sorry--that is simply the tax law.  It is not a glitch in the TT software, nor is it an IRS glitch.  If you think the law is unfair, write to your Congressman.  They passed the tax laws.

[DoninGA]

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@DEANOS wrote:

When a taxpayer does not have the advantage of itemizing due to insufficient deductions, he should still be able to deduct his losses. Gambling winnings should not be counted as income when his losses exceed his winnings. There is obviously a glitch in Turbo tax or in the IRS stipulation. 

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That is the way the tax code is written.  Gambling losses can Only be entered as Miscellaneous itemize deduction on Schedule A and cannot be more than the gambling winnings.

IRS Schedule A Instructions page 13 - https://www.irs.gov/pub/irs-pdf/i1040sca.pdf#page=13

• Gambling losses (gambling losses include, but aren't limited to, the cost of non-winning bingo, lottery, and raffle tickets), but only to the extent of gambling winnings reported on Schedule 1 (Form 1040 or 1040-SR), line 8.

[ggp24]

Hello,

I know this question is a year old, but I have a follow up. I am definitely itemizing deductions. My wife has a W2-G for 14K. We entered an offset of 11K following TurboTax. The tax due for Fed or State (IL) does not change regardless of whether this amount is 0 or 14K. That seems to be a problem. Any ideas?

Thanks!

[xmasbaby0]

@ggp24 If you are filing a joint return your standard deduction is $24,400 (+$1300 for each spouse 65 or older) so unless the total of your itemized deductions exceeds that amount, there will be no effect from entering your itemized deduction for gambling losses.

[ggp24]

Thank you for responding. Even when I itemize deductions, it does not make a difference. In fact, the 11K loss puts it way over the 24.4K standard. It has zero impact. Could this be some bug? I can't think of any workaround.

[CatinaT1]

Do you have your gambling income entered?  Gambling losses will only be offset up the the income amount.