This would include any paperwork or receipts that demonstrate you played at a casino and lost. The important thing is that you “substantiate” any losses claimed as a result of gambling activity. Keep that in mind when you report on line 21 of Form 1040. Gambling losses are deductible only to the extent of your winnings.Nonprofessional gamblers who fail to itemize deductions lose the tax benefit of deducting their losses.After all, most gamblers lose more often than they win.

Itemize deductions on Schedule A in order to take advantage of gambling losses.

In order to minimize taxes owed to the IRS for amateur/casual gamblers, you will want to do the following: The only similarity amateur gamblers and professional gamblers share is the gambler tax deduction for losses is limited to the amount of gambling winnings.You can’t deduct more than you actually lost. Since the activity is a result of a trade or business, winnings, losses, and related expenses are reported on Schedule C.

Professional Gamblers: Professional gamblers are no different from any other self-employed individual.

Gambling losses may also be reported on line 28 of Schedule A as miscellaneous itemized deductions.

Casual Gamblers: Casual or amateur gamblers report their earnings as “other income” on line 21 of Form 1040.

The status of your gambling activities impacts how you report your earnings and how you minimize taxes owed: Though most individuals who gamble are casual and non-professional gamblers, there are some who do it enough to rise to the level of a professional trade or business venture. Learn more about how to minimize taxes from gambling activities and other common concerns for those who have winnings to report this tax season. Some may even be asking: do you have to report gambling winnings?Īll of these questions are valid and common concerns of regular taxpayers who may have hit it big in Vegas or somewhere else where organized gambling is legal. In the event that you strike it rich, you’ll probably wonder how you go about reporting your gambling winnings to the IRS. Gambling, when done in moderation and legally, can be a fun activity for many to partake in.

Avoid paying taxes poker winnings