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The tax laws about gambling winnings / losses seem very unfair -- I just hope I'm understanding them incorrectly!

This is a bit long, but please stay with me as I could really use some input here... I've been placing some bets at a couple of sportsbooks nearby. I usually compare lines to see which book has the best number and I place my bet with the book that has the most beneficial line. Due to what I would consider an oddity, I have won nearly all of the bets placed with Sportsbook A and lost most of the bets placed with Sportsbook B.
I didn't really document things since I have pretty much been breaking even on all bets, but the other night while I was playing blackjack at the casino where Sportsbook A is located, I was approached by a pit boss who told me I was on the "banned list" due to transactions totaling over $10,000 in a 24-hour period. I thought this was odd, but I did place a lot of bets there one day a couple of weeks ago that may have exceeded that total. The pit boss said that I needed to provide my current ID and my Social Security Number, for which I didn't know what else to do, but to comply and give him these items.
Here's my question... From what I figure, I have probably cleared $15k or so between table games / sports bets with Sportsbook / Casino A and lost nearly that amount with Sportsbook B. I have some of my losing tickets for Sportsbook B, but not all. I am now worried that Sportsbook A will report my winnings to the IRS and it will look like I'm a winner of $15k instead of the reality of being a little bit ahead. Would Sportsbook A report these winnings to the IRS now that they have my info? Unlike Sportsbook B except on one or two occasions, Sportsbook A usually asks for my player's card when I place a bet, so all of my action is tracked by them. Obviously Sportsbook B wouldn't report the losses, so as far as the IRS will see it, I would be a positive $15k.
I know that if you itemize deductions on your taxes that you can write off gambling losses up to the amount of winnings, but I don't itemize and usually take the standard deduction of $12k or whatever the figure is... So am I going to be required to pay taxes on at least $12k of the amount won with Sportsbook / Casino A since if I did itemize the losses from the other book it would only give me a net loss of $3k extra over the standard deduction?
Seems RATHER unfair to have to pay taxes on around $12k when there may only be around a $1k profit! I hope that I'm just understanding the tax law incorrectly.

Please help if you have any knowledge / expertise in this area as I don't think I should be required to pay crazy taxes on pretty much break-even gambling.

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2 Replies

The tax laws about gambling winnings / losses seem very unfair -- I just hope I'm understanding them incorrectly!

You might not believe the tax law is fair---but the tax law is what it is.  And you do not get to subtract your losses from your winnings and only claim the amount that you came out "ahead" by.  ALL of your winnings have to be reported on your federal income tax return.  

 

If you do not have enough itemized deductions to use them on your tax return, then your gambling losses have no effect at all.  You just pay tax on the winnings.   Gambling losses are an itemized deduction.  In order to use itemized deductions on your tax return, you must have enough itemized deductions to exceed your standard deduction.  

 

We are not counselors here, but I think you might benefit from seeking some professional counseling if your gambling problem is becoming so serious you are being banned from casinos, etc. and getting yourself into tax problems.

 

More information:

 

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/

 

https://ttlc.intuit.com/questions/1900352-can-i-deduct-my-gambling-losses

 

 

 

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)

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

The tax laws about gambling winnings / losses seem very unfair -- I just hope I'm understanding them incorrectly!

in some states it's even more unfair.   winnings taxable. schedule A gambling losses not deductible. 

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