If you’re not in the business of gambling, and you itemize your deductions on your tax return, you can claim your losses as an “other miscellaneous deduction.” That said, you can only claim losses up to the amount of gambling income you’re reporting for the year on Form 1040, Line 21, even if you lost more than you won. If you’re in the business of gambling you’ll use Schedule C instead.
To claim your losses, you need to keep a record of both your gambling winnings and losses, including:
- The date and type of your specific gamble or gambling activity
- The name and location of the gambling establishment
- The names of other people who were with you, if applicable
- The amount you won or lost
- Receipts, bank statements and payment slips
- Form W-2G (if you receive one)