How to Write Off Gambling Losses on Your 2024 Tax Return
Gambling comes with wins and losses—and it’s a good idea to keep track of both. According to IRS rules, gambling wins are taxable and must be listed on your tax return. If you have a winning year, you’ll pay extra taxes.
But there is good news. You can offset your wins and write off gambling losses if your total deductions exceed the standard deduction amount. Did you win $400 on a lucky craps bet only to give back $300 back to the casino after a bad run at the sportsbook? You’ll only pay taxes on the $100 you actually won.
Let’s break down how to lower your tax bill and claim gambling losses on your 2024 tax return.
Keep Detailed Records
You may remember every win and loss, but the government wants exact details. The first step in writing off gambling losses is to keep track of every gambling session. You can record:
- The date
- Game type (blackjack, slots, horse betting, etc)
- Game location
- The amount won or lost.
Report Your Wins
The IRS only considers gambling losses if you also report winnings. That’s because you can only deduct as much as you win. So, if you won $500 and lost $10,00, you can only write off $500.
Gambling wins are classified as “other income” and listed on line 21 of Form 1040. Make sure to include any money won, whether it’s from a casino, lottery, or fantasy sports app.
W-2G form
If you win enough money, you might receive a W-2G form. This form reports the amount of your winnings and is issued by the payer. Remember to keep the form safe and include it with your tax return.
Casinos and racetracks typically provide W-2G forms if you win:
- $5,000+ playing poker
- $1,500+ playing keno
- $1,200+ playing slots or bingo.
- $600+ betting or playing any game not listed above if the payout represents 300 times the initial wager.
Itemize Your Deductions
The standard deduction for the 2024 tax year is $14,600 for single filers and $29,200 for joint filers. If your total itemized deductions—including gambling losses—exceed this amount, it makes sense to claim them.
Itemizing requires more paperwork and careful record-keeping but can significantly reduce your tax bill.
Provide Proof
The IRS is more likely to accept your gambling deductions if you provide proof. This is especially true if you’re claiming a significant loss. Your proof might include:
- Extensive records
- W-2G forms
- Losing tickets or receipts
- Bank statements showing gambling withdrawals.
What About Professional Gamblers?
Is gambling more than just a hobby? Professional gamblers can write off their losses as business expenses instead of itemized deductions. Professionals can also deduct expenses like rental cars and hotel rooms if they travel.
However, there are strict guidelines regarding what qualifies as a professional gambler. You’ll have to demonstrate regular play; a session here and there won’t cut it.
Conclusion
Depending on your situation, writing off gambling losses on your 2024 tax return can help lower your taxes and potentially increase your refund. However, some work is required on your end. For the best chance of success, you’ll need to keep detailed records, report all winnings, and provide proof of losses.
You can make tax filing easier by working with a professional. The experts at Kondler & Associates, CPAs, can help you understand the tax implications of your gambling losses and maximize your savings, no matter your situation. We’re confident that our team can guide you to the right solution.
Ready to prepare your 2024 tax return? Contact us today for a free consultation.
