W2g Gambling winnings offset by losses

[s_starnadori]

My W-2 G gambling win is offset by losses. In deluxe version when I claim the loss amount As the same amount as the win  it does not change my refund amount back to where it was before. Or at all for that matter.  I keep reading about itemize deductions  are required however when I change to itemized my refund is even less. TurboTax keeps recommending standard deduction. So it seems although I lost more money then I won I am not able to get my expected refund if I claim this W-2 G win. 

[Lisa995]

You can only input gambling losses into itemized deductions, you cant net them out with the winnings on the front page of the return..

[s_starnadori]

I don’t understand if I got a W-2 G for a jackpot of $3700, but lost over $5000 at the same casino that issued. Why am I paying taxes on the 3700? I lost way more than 3700 at the same casino

[DoninGA]

Losses are only deductible up to the amount of your winnings.  Your winnings are entered on tax return as ordinary income.  Any losses are only entered as itemized deductions.  That is the tax code.

[Lisa995]

The house always wins!

[DoninGA · Accepted solution]

Gambling losses can only be deducted up to the amount of the gambling winnings.  Gambling winnings are reported on Form 1040 Schedule 1 Line 21 as Miscellaneous Income.  Gambling Losses are reported on Form 1040 Schedule A as a Miscellaneous itemized deduction.  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.

[kellygary6]

Maybe.

Most people just enter their W2-g as income. Then they enter their losses upto, but not exceeding the amount of W2g winnings.   But - and a big BUT - if your total itemized deductions are less than the standard deduction, then you do that instead and pay tax on the the W2G income... even if you put it all back and/or had a loss for the day.

It appears the IRS allows you to do session accounting. The Journal of Accountancy has an article about this.

[timot28]

The form 1040 calculates your Adjusted Gross Income before deductions are taken, so it includes all of your winnings, but none of your gambling losses, as deductions are on the following page.  For most people this is no big deal, as taxes are calculated on income after deductions.   

But if you're a senior on Medicare, your premium is based on your A.G.I., and  is subject to a High Income Premium Adjustment.   I was paying a couple thousand a year extra in premium adjustments until it occurred to me to file as a professions gambler.  Schedule C (business gains and losses) allows you to deduct your losses prior to the calculation of your A.G.I.  The IRS confirmed this was OK if gambling was my sole source of earned income and I played seriously and on a regular basis.  I amended as many returns as I could and received a check reimbursing me for over $7K in excess High Income adjustments.

[Subaruwrx007]

Because you're a red blooded,  country loving, gambling loving, free American man.  But it costs you.. 

[tootsie1923]

Do gambling winnings make my income go to another level so I'm paying more even when I have more in losses?

[KrisD15]

Possibly. 

Any amount won gambling is taxed. 

It is POSSIBLE to claim the gambling losses you had, but it isn't as easy as it sounds. 

Gambling winnings are reported as income.  DONE

Next, gambling losses can be entered into your TurboTax program and IF they make your Itemized Deductions higher than the Standard Deduction, the amount of losses with be included in your Itemized Deductions, along with other deductions, such as Medical Expenses and Home Interest paid. 

You are only allowed to claim losses up to the amount you won, not more. 

MOST people use the Standard Deduction. If you also end up taking the Standard Deduction, the gambling loss amount is, well, lost.