Report Gambling Losses to the IRS

Some people think that the only time they have to report gambling information to the Internal Revenue Service is if you have a win for more than $600. However, you can also report losses to the IRS if you keep excellent records.

If you win a large amount, the casino will give you either a Form W2-G or a Form 1099-Misc. for Miscellaneous Income. Years ago the IRS tried getting the casinos to use the former form instead of the latter, but some casinos still use it. Usually they will use a 1099 if you get a prize instead of a direct win from a wager.

When filing your tax return form 1040, you can report your gambling winnings on the Other Income Line. You can then offset your taxes by reporting your losses, but again, you must keep perfect records in order to do so. At some point the IRS will come looking for the evidence to support your losses, so you’d better have it.

You must itemize to get the deduction, you cannot get it if you take the standard deduction. And the losses must have taken place that year, they cannot be counted toward previous or future years’ returns.

In order to get the deduction, experts suggest keeping a diary of all wins and losses, trips to the casino, etc. so that you can reference them for the IRS. Keep a note of dates and times, amounts lost and played, number of the table or slot machine that you were playing, casino playing in, etc. You can also claim airline tickets, etc. for going to the casino, but again, you must be able to prove it to the IRS.

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