Gambling losses are indeed tax deductible, but only to the extent of your winnings. Find out more about reporting gambling losses on your tax return.

Gambling losses are indeed tax deductible, but only to the extent of your winnings and requires you to report all the money you win as taxable income on your return. The deduction is only available if you itemize your deductions. If you claim the standard deduction, then you can't reduce your tax by your gambling losses.

Keeping track of your winnings and losses

The IRS requires you to keep a log of your winnings and losses as a prerequisite to deducting losses from your winnings. This includes:

lotteries

raffles

horse and dog races

casino games

poker games

and sports betting

Your records must include:

the date and type of gambling you engage in

the name and address of the places where you gamble

the people you gambled with

and the amount you win and lose

Other documentation to prove your losses can include:

Form W-2G

Form 5754

wagering tickets

canceled checks or credit records

and receipts from the gambling facility

Limitations on loss deductions The amount of gambling losses you can deduct can never exceed the winnings you report as income. For example, if you have $5,000 in winnings but $8,000 in losses, your deduction is limited to $5,000. You could not write off the remaining $3,000, or carry it forward to future years.

Reporting gambling losses To report your gambling losses, you must itemize your income tax deductions on Schedule A. You would typically itemize deductions if your gambling losses plus all other itemized expenses are greater than the standard deduction for your filing status. If you claim the standard deduction, You are still obligated to report and pay tax on all winnings you earn during the year.

You will not be able to deduct any of your losses.