Question

How do I report gambling winnings and deduct gambling losses?

Answer

Online winnings are fully taxable so you must report gambling winnings, even those that didn’t have tax withheld.

You might be able to deduct gambling losses. So, keep a record so you are able to report gambling winnings and deduct gambling losses with accuracy.

To deduct gambling losses, you must provide records that show the amounts of both your winnings and losses, like:

  • Receipts
  • Tickets
  • Statements

Enter your winnings in the Form W-2G topic or as Other Income. To deduct gambling losses, you must itemize your deductions:

  • 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.

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