How do I claim my online gambling winnings and losses?
Online winnings are fully taxable. You must report all winnings, including those that didn't have any taxes withheld from them.
Since you might also deduct your losses, keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must provide records that show the amounts of both your winnings and losses, like:
If you're a casual gambler, you'll enter your income from winnings on Form 1040, line 21. You must itemize your deductions to deduct gambling losses on Schedule A. Claim your gambling losses as a miscellaneous deduction not subject to the 2% limit. Your losses must be equal or less than the gambling winnings you reported as income.
If you're in the trade or business of gambling, you must report your income and claim expenses on Schedule C. Although you can deduct these expenses, they're limited to gambling income. So, a professional gambler can't have a net loss for tax purposes.
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This advice is for general information purposes only and may not apply to you. Every tax situation is different. This is not intended to be legal advice. Taxpayers should consult an H&R Block Tax Professional regarding their individual tax situation.