Solved: Why did my refund not increase when I entered my gambling losses?
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Why did my refund not increase when I entered my gambling losses?

we had gambling winnings totaling over $10K, however, we also loss over $7K, why didn't my refund increase when I entered my losses?
1 Best answer

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Level 4

Why did my refund not increase when I entered my gambling losses?

The IRS can seem harsh when it comes to gambling.

You might assume that if you won 10,000 but lost 7,000, you would only have to report and only be taxed on, 3,000; however, that is not how the IRS handles it.

Gambling winnings are reported as income on line 21 of your 1040 and is included in your Adjusted Gross Income(AGI).

Gambling losses can be deducted, but only up to the amount of winnings, and reported on line 28 of your Schedule A.

Schedule A is used to see if your Itemized Deductions are more than the Standard Deduction of your filing status.

If the amount of your Schedule A is not more than the Standard Deduction, you will use the Standard Deduction option, which means the gambling loss is of no consequence to your deductions and will not increase your refund.

"Gambling Losses

You may deduct gambling losses only if you itemize your deductions on Form 1040, Schedule A (PDF), and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as an "Other Miscellaneous Deduction" (line 28) that's not subject to the 2% limit."

https://www.irs.gov/taxtopics/tc419.html




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1 Reply
Level 4

Why did my refund not increase when I entered my gambling losses?

The IRS can seem harsh when it comes to gambling.

You might assume that if you won 10,000 but lost 7,000, you would only have to report and only be taxed on, 3,000; however, that is not how the IRS handles it.

Gambling winnings are reported as income on line 21 of your 1040 and is included in your Adjusted Gross Income(AGI).

Gambling losses can be deducted, but only up to the amount of winnings, and reported on line 28 of your Schedule A.

Schedule A is used to see if your Itemized Deductions are more than the Standard Deduction of your filing status.

If the amount of your Schedule A is not more than the Standard Deduction, you will use the Standard Deduction option, which means the gambling loss is of no consequence to your deductions and will not increase your refund.

"Gambling Losses

You may deduct gambling losses only if you itemize your deductions on Form 1040, Schedule A (PDF), and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as an "Other Miscellaneous Deduction" (line 28) that's not subject to the 2% limit."

https://www.irs.gov/taxtopics/tc419.html




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