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Gambling Losses

The IRS views gambling wins as income, and you’ll have to pay taxes on that money. However, if you also lost money gambling, you may be able to take this deduction.

You’ll need to report the full amount of money you won gambling. You can’t subtract your losses from your winnings and report the difference as income. If you lost money, you can deduct that amount, but your deduction for gambling losses can’t exceed your winnings.

Losses must be claimed as an itemized deduction. The IRS requires you to keep an accurate diary or similar record of your losses and winnings, and this record should show winnings and losses separately. The record or diary should include the following information:

  • Date and time of wagers.
  • Type of wagering/gambling activity.
  • The name and address or location of the gambling establishment where you incurred the win or loss.
  • The names of other people present with you when you gambled.
  • The amounts you won or lost.

You should also have other documentation as proof of your winnings and losses, such as:

  • Form W-2G for gambling winnings
  • Form 5754
  • Wagering tickets
  • Canceled checks
  • Substitute checks
  • Credit records
  • Bank withdrawals
  • Statements of actual winnings or payment

Still have questions? Contact member support

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