If you reported your $5,661 of income as 'hobby income', you would still need to itemize to deduct the $1,300 to offset any income. Itemized deductions, such as state and local tax payments, mortgage interest, charitable contributions exceeding $300, and medical and dental expensesFor federal purposes, you can no longer claim an itemized deduction for a casualty or theft loss unless it is the result of a federally declared disaster. You. If you claim the standard deduction, you won’t be able to write off. TurboTax keeps. Also, the amount of gambling losses you deduct cannot be more than the amount of gambling income you reported on your return. We do not control the destination site and cannot accept any. The full amount of winnings must be reported as income, and the losses can be claimed as an an itemized deduction up to the amount of the winnings. Luckily, if you itemize deductions on Schedule A, you can take a deduction for your gambling losses, but it can never be more than your gambling winnings. If married, the spouse must also have been a U. Form 1040 Schedule A. If you claim the standard deduction, you cannot deduct any gambling losses. For example, if you won $5,000 in a casino but lost $7,000, you can only deduct up to $5,000 of your losses. Thus, a casual gambler may only use this new deduction if the taxpayer elected to itemize deductions on the federal income tax return rather than take the standard deduction. The summation would be winnings of $2529; however, the actual winning bets would be $5000. There is no dollar limit on the write off but it’s limited to the extent of the gambling winnings. Gambling losses can only be deducted up to the amount of the gambling winnings. But there are still some tax deductions - known as above-the-line deductions - you can take without itemizing. John reports his $23,500 of wins on Schedule 1 and $23,500 as an itemized deduction on Schedule A. These can be found on the front of your federal Form 1040 in the Adjusted Gross Income section. It is possible to deduct Kansas gambling losses on your tax return. You can only deduct gambling losses up to the amount of your winnings if you itemize deductions on Schedule A. If, or unfortunately when, you ever are in a major natural disaster, the ol' blog's special Storm Warnings pages can help in preparing for, recovering from (including claiming uninsured disaster losses as an itemized tax deduction), and helping those who sustain damages from the many ways that that weather goes wild. Meaning if you win $2000 and lose $5000, only $2000 worth of gambling losses will qualify for deduction, and the rest can still be taxed. Ones total tax is based on a wide variety of factors. One final note: casual gamblers can deduct gambling losses as well, but not the same way as professionals. The deduction is equal to the wagering losses claimed by the taxpayer as an itemized deduction on the federal income tax return for the same tax year. You’ll need a record. In addition, you won't be able to write off gambling losses unless you itemize your deductions . The easiest and most accurate way to find out how to report your gambling winnings and losses is to start a free tax return on eFile. First, you can only deduct losses up to the amount you won that year. Gambling Loss Limitation. In general, individuals not in a trade or business or an activity for profit, may take a standard deduction or itemize their deductions. Casinos send a W-2G form to the IRS for winnings above specific thresholds ($600 or more for most games). For example, let’s say you have $2,000 in recorded wins at Golden Nugget Casino Michigan but $3,000 in recorded losses. $1,500 or more from keno after your wager. Fortunately, you can deduct losses from your gambling only if you itemize your deductions. Deductible Losses. Limitations apply. Gambling Losses. For tax years prior to 2018 and after 2025, you can only deduct casualty losses not reimbursed or reimbursable by insurance or. Gambling losses can be deducted from. make sure you take note of all gambling losses for the year including other casinos. sorry, that is wrong. YOU DO NOT PUT $500 IN THE INCOME SECTION. As an example, let’s say that in a given year you went gambling twice, winning $6,000 in one instance, but losing $8,000 in. You can deduct your $50,000 of gambling losses as an itemized deduction. Gambling losses are deductible on your 2020 federal income tax return but only up to the extent of your gambling winnings. For the most part, an individual may claim those deductions allowable as itemized deductions under the Internal Revenue Code. Generally, if your deductions exceed $2,690, it will benefit you to itemize. For example, if you win $2,500 from gambling but lost $4,500, you can only deduct $2,500 of those losses. But in order to take your gambling losses, you have to itemize, so the next $17,500 of gambling. 2022, see Pub. People who have claimed gambling losses as a deduction from their IRS returns know that the IRS requires you to itemize your deductions to do so. Wins are reported on Schedule 1 line 8. And in order to deduct your losses, you have to be able to itemize your deductions. For example, if you wagered $5,000 and won $2,000, you can only deduct $2,000 in losses. See TSB-M-18 (6)I, New York State Decouples from Certain Personal Income Tax Internal Revenue Code (IRC). If you have gambling winnings reported on Form W-2G (Certain Gambling Winnings), you can deduct your gambling losses up to the amount of your winnings on Schedule A (Itemized Deductions) of your federal income tax return. If you itemize, you can claim your gambling losses up to the amount of your winnings on Schedule A, Itemized Deductions, under ”Other Miscellaneous Deductions. You won't be able to deduct gambling losses if you lost more money than you won (excess losses) or if you're taking the Standard Deduction. Those betting sites should be issuing you a tax form. You must report the full amount of your winnings as income and claim your allowable. Ones total tax is based on a wide variety of factors. So if you had winnings of $2,000 and losses of $5,000, your deduction is. nakor28 • 3 yr. Form 1040 Schedule A. Or at all for that matter. The Internal Revenue Service allows you to deduct gambling losses if. Instead, you must report your gambling income and gambling expenses separately. An individual may claim itemized deductions on an Arizona return even if taking a standard deduction on a federal return. Footnote 7 Gamblers can deduct their gross losses but only if they are itemizing deductions and these losses can only be used to offset gross winnings. 1040 Page 2: Income Tax. Charitable Cash Contributions, Even If You Don’t Itemize. To deduct your losses from gambling, you will need to: Claim your gambling losses on Form 1040, Schedule A as Other Miscellaneous Deduction (line 28) that is not subject to the 2% limit. Only professional gamblers can deduct non-wager losses and business expenses that create a net gambling loss. "Let's say you bet $1,000 and you get $3,000 back," says Romeo Razi, a Las Vegas-based. The key is you can’t deduct losses that amount to more than what you’ve won. To deduct gambling losses, you must itemize your deductions: Claim your gambling losses as a miscellaneous deduction not subject to. Your gambling loss deduction cannot be more than the amount of gambling winnings. Detailed records could be a diary of receipts, tickets or other records that show accurate amounts of bets. Anyways, for the tax year 2021 (aka the taxes you file in April, 2022), the standard deductions are as follows, based on your filing status: $12,550 for single filers and married filing separately, $26,900 for joint filers, and. If you claim the Standard Deduction, then you can't reduce your tax by your gambling losses. Therefore, if you don’t itemize and take the standard deduction, you can’t deduct gambling losses. Gambling losses can only be deducted up to the amount of the gambling winnings. Gambling Losses are reported on Form 1040 Schedule A as a Miscellaneous itemized deduction. The additional losses are not deductible. However, this is only the case if you are able to itemize those losses. If your winnings are reported on a Form W-2G, federal taxes are withheld at a flat rate of 24%. Don't include on. But whether you’re wagering on. Once entered, you will be asked about gambling losses. If you don’t take advantage of excess itemized deductions,. If you have no winnings to claim, you can’t deduct your losses. You can’t deduct gambling losses if you take the standard deduction. The tool is designed for taxpayers who were U. You must report the full amount of your winnings as income and claim your allowable losses If you do not itemize , there is nothing you can doYou cannot adjust the w-2 by the losses. This is where the TCJA raising of the standard. For example, your medical and dental expenses are only deductible to the extent they exceed 7. DoninGA. Still, if your standard deduction is greater than your itemized deduction, there is no benefit to claiming the gambling losses. In short: The only reason to actually deduct gambling losses would be if they — along with other deductions — are more than the standard deduction. 1. Let's say you won a total of $7k at 3 different casinos but you play at 5 different casinos. So if you won $2,500 gambling in 2014, the most you can deduct of your losses is $2,500 — no matter how much you lost. Any information provided to you on a Form W-2G. You have to actually have to have winnings to be able to deduct losses. For a married couple filing jointly, the wagering winnings of. But if you don’t itemize, you cannot deduct those losses. In other words, if you are in the ~90% of americans who claim the standard deduction, you are screwed if you gamble, because you get taxed on gross winnings,. Gambling losses are not a one-for-one reduction in winnings. e. you would have to report all $10K of gambling winnings in your income, whether to itemize with the offsetting losses or take the standard deduction is up to your specific tax situation. So if you lose $500 but win $50, you can only deduct $50 in losses on your federal income tax returns. That way, you don't leave anything on the table. His gambling losses are $37,900. 205 - Capital Gains and Losses: 03/06/2023: 206 - Pensions and Annuities: 03/06/2023: 207 - Farming and Fishing Income: 03/06/2023: 208 - Gambling Income and Expenses: 03/06/2023: 209 - Nontaxable Income: 03/06/2023: 210 - Earnings of Clergy: 03/06/2023If you itemize deductions, you can deduct your gambling losses for the year on line 27, Schedule A (Form 1040). You must always report your winnings and losses separately, rather than doing it on one document and reporting a net amount. You may deduct gambling losses only if you itemize deductions. Itemized deductions are usually personal in nature and don't include business expenses. So if you make $60,000, and you choose the standard deduction amount of $12,550, your. Know what you can and can't claim to maximize your potential tax savings. You can "back it out" as a negative number on the "other income" line (use the amount of the winnings as a negative number, don't create a loss on the tax return). 00. So if you won $1,000 but lost $2,000, you can only deduct up to $1,000. Your total gambling deduction is limited to $800, the amount of your winnings. In addition, your gambling losses will only be able to be deducted on Schedule A if you itemize your deductions, as opposed to taking the standard deduction. Professional gamblers don’t have to itemize to claim losses—those also can go into a Schedule C. Meanwhile,. You can claim these deductions regardless of whether or not you claim the standard deduction or opt to itemize your deductions. You can claim an "above-the-line" deduction on Schedule 1. Gambling Losses You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040 or 1040-SR) PDF and kept a record of your winnings and losses. If you are filing your taxes by the book, you should never gamble in IL unless your edge is higher than their 4. e. The deduction is equal to the wagering losses claimed by the taxpayer as an itemized deduction on the federal income tax return for the same tax year. Gambling Losses are reported on Form 1040 Schedule A as a Miscellaneous itemized deduction. (If you're working online,. Under Federal law, gambling losses are deductible for Federal tax purposes for those who are able to itemize their deductions. Topic No. Individuals who don’t use excess itemized deductions are more likely to see a tax cut. they can provide a win/loss report. But the amount of losses you deduct can’t be more than your reported gambling income. If you use itemized deductions, your gambling losses qualify as a deduction on your federal tax return. You are able to deduct gambling losses up to the amount of your gambling winnings. You should speak with a Virginia tax attorney about whether and how to deduct your losses as the rules can be confusing. Claim your gambling losses up to the amount of winnings, such as Other Itemized Deductions. They do not offset. You have $200 in gambling income. You cannot use gambling losses to create or increase a tax loss. Those include total income, sources of that income, filing status, number of dependents, what deductions and/or credits one qualifies for, and a host of other variables. For example, the IRS. However, in 2021, that $300 is deductible. You can’t deduct more than you won, even if you did actually lose more than you won during the course of the year. S. Second, you can only claim those gambling losses. Most people — in fact, an estimated 90% of filers — take the standard deduction instead. To deduct your losses from gambling, you will need to: Claim your gambling losses on Form 1040, Schedule A as Other Miscellaneous Deduction (line 28) that is not subject to the 2% limit. "You are able to deduct gambling losses up to the amount of your gambling winnings. You must include the U. If they’re married to another educator and they’re filing jointly, the limit rises to $500. ) If you claim the standard deduction, (because you don't have enough expenses to itemize) then you can't reduce your tax by your gambling losses and therefore. ago. You cannot deduct gambling losses unless you itemize (or are a professional gambler). The $11K withholding has been reported to the IRS. Your gambling losses up to the amount of your winnings ($11K) can be deducted as an itemized deduction on Schedule A. In addition to the limitation on how much you can deduct, you can only deduct your sports betting losses if you itemize your deductions. You may or may not receive Form W-2G Certain Gambling Winnings, but you can report all gambling winnings in the same place in the TaxAct program. Contributing to a 529 college savings account can offer tax advantages, including tax-deferred growth and tax-free withdrawals for qualified education expenses. 501, Should I Itemize? Deductions reduce the amount of your taxable income. Gambling losses are deductible on your 2020 federal income tax return but only up to the extent of your gambling winnings. Additionally, winnings and losses must be reported separately, i. However, effective for tax years beginning January 1, 2021, c asual gamblers may deduct wagering losses claimed by the taxpayer as an itemized deduction on the federal income tax return for the same tax year. “The U. You would then enter total winning on schedule C and losses as business expenses. If you don’t itemize you are screwed! You cannot deduct losses on a standard deduction. You’ll need a record. As you pointed out, if there was no "session" gain, there there is $0 of taxable gambling income to report. If you do elect to itemize your federal deductions, calculate all your gambling losses from the year. To deduct your losses from gambling, you will need to: Claim your gambling losses on Form 1040, Schedule A as Other Miscellaneous Deduction (line 28) that is not subject to. If you’re in the red for the year, don’t expect to recoup those losses with tax deductions. Taxpayers who are age 65 or older on the last day of the year and don't itemize deductions are entitled to a higher standard deduction. You can’t deduct your losses without reporting your wins. Mega Millions. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions. Your gambling loss deduction cannot be more than the amount of gambling winnings. So, if you made $10,000 on gambling last year but lost $12,000, you can only deduct $10,000 in losses (nothing more). That is, if you won $50,000 and lost $55,000, you could only deduct $50,000 of your losses. In addition, gambling losses are only deductible up to the amount of gambling winnings. Gambling losses go on schedule A line 28 and are not subject to the 2% threshold. To calculate your gambling losses, you should keep accurate records of your wins. Using itemized deductions you would have $27,300 offsetting the $20,00 so you are better off using the standard. Losses do not offset winnings dollar for dollar. Due to the passage of the Tax Cuts and Jobs Act of 2017, most individuals choose to use the standardized deduction rather than itemizing deductions on their tax returns. Without seeing your documentation it is hard to be sure, but based off your summary, it seems ok. S. But if you have the proper documentation for your deduction, loss or credit, don't be afraid to claim it. Secondly, they are part of your itemized deductions. If you don't have enough other deductions to itemize, then it is to your. That being said, if you do itemize and your gambling losses are on your Schedule A, be careful. The best outcome is that you cancel out any W2-G wins on your return. If you used your players card, you. In making its decision, the court relied in part on the testimony of a gaming industry expert who testified on behalf of Coleman. Itemized deductions are expenses that you can claim on your tax return. Moving the gambling income to page one of Form 1040 and the gambling losses to miscellaneous itemized deductions (not subject to the 2% limit), and using the figures in the case, but calculating the changes using 2005 rates, he would have lost slightly over $1,200 of itemized deductions had he claimed gambling income of $325,668 ($10,538. GAMBLING GOTCHA #1 – Since you can’t net your winnings and losses, the full. Thanks to a bill signed in 2021, you can deduct losses equal to your winnings. In that case, your gambling loss deduction is limited to $7,500. However, for a casualty loss that is the result of certain federally declared disasters (Form IT-196, line. If you were issued a W2G form for your FanDuel gambling winnings, it is mandatory to report them on your tax return. Folks who deduct gambling losses from their state income bills may also see a tax hike, Erspamer said. You are permitted to deduct gambling losses if you itemize your deductions. Gambling losses are. Gambling Losses May Be Deducted Up to the Amount of Your Winnings. With current law you would add $30k to your income meaning you have $80k of income subtracted by your itemized deduction of $28k. For 2021, the standard deduction numbers to beat are: Single taxpayers: $12,550. It may not seem very easy, but Bounds Accounting will lead you through the process from start to finish. In other words, you can’t have a net gambling loss on your tax return. This can limit some taxpayers’ other deductions, including medical and miscellaneous itemized deductions. It is your responsibility to properly track and report your losses by keeping accurate records of gambling winning and losses using receipts, statements, tickets, or other records as proof. The key is you can’t deduct losses that amount to more than what you’ve won. Claim your gambling losses up to the amount of winnings, as "Other Itemized. 63%. With a refinance, you can deduct points over the life of the loan — so, as an example, you could deduct 1/30th of the points every year for a 30-year mortgage, which would total $33 per year for. Before the law, professional. Gambling Losses are reported on Form 1040 Schedule A as a Miscellaneous itemized deduction. Here is a screwed up scenario. Gambling winnings must be reported as income, but gambling losses are deductible only as an itemized deduction. This will offset your winnings. For example, if you had $10,000 as gambling winnings and $15,000 as losses, you can only deduct your losses up to $10,000. Depending on the amount of gambling winnings, you may be required to pay an estimated tax on that additional income. If I have w2-g's in the amount of $10,000 and my win/loss. You are allowed to list your annual gambling losses as an itemized deduction on Schedule A of your tax return. The Tax Cuts and Jobs Act of 2017 eliminated most miscellaneous itemized deductions allowable that are over 2% of adjusted gross income (AGI) in. The IRS takes a broad view of what constitutes a. Here’s a breakdown of each: 1. You are allowed to deduct gambling losses, but only to offset income from gambling wins. Yes, you are correct that you can zero out the income with the cost of the used items, but the reduction is only allowed to the extent of the earnings. Your deduction for charitable contributions generally can’t be more than 60% of your adjusted gross income, but in some cases 20%, 30%, or 50% limits may apply. If you plan to deduct your losses, you must keep careful records and itemize your taxes in order to claim the losses. You report gambling winnings as Other Income on the 1040. If you do not itemize, you may elect to take the standard deduction of $2,690. Itemized deductions, such as state and local tax payments, mortgage interest, charitable contributions exceeding $300, and medical and dental expensesIf you report gambling winnings of $10,000 on Line 21 of your Form 1040, the most you can deduct as gambling losses on Schedule A is $10,000. Do you have to itemize deductions to claim gambling losses? Yes, gambling losses are only deductible as an itemized deduction on Schedule A. If you itemize instead of taking the Standard Deduction, you can deduct gambling losses up to the amount of your winnings. If you don’t report, you may get hit with higher withholding levels on the Federal level. You may deduct gambling losses only if you itemize deductions. That $300 applies whether you're a single filer or you file a joint return. This can limit some taxpayers’ other deductions, including medical and miscellaneous itemized deductions. m. You don't report your. Casual Gamblers: Casual gamblers, who gamble for leisure and don’t earn a living from it, can deduct gambling losses as a miscellaneous itemized deduction on Schedule A (Form 1040), subject to the limitation that losses can only be deducted up to the amount of winnings reported. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Once entered, you will be asked about gambling losses. The deduction however, unlike the gambling deduction, is subject to the 2%. If you itemize deductions , you may claim gambling losses up to your gambling winnings. Tickets. Furthermore, you cannot offset your winnings from one day. When filing your return, you reduce your taxable income by subtracting the greater of either the standard deduction or your total itemized deductions — which may include charitable donations. Gambling losses. Gambling losses: Gambling losses are deductible to the extent of gambling winnings. 95% state tax rate. For 2022 tax returns (those filed in 2023. ) The sessions will always break even (unlikely) or net out as a gain because losses are not allowed between sessions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return ; Please refer to this IRS link for more information about reporting gambling winnings and losses. They will tax you, at the state level, on gross winnings. You can't. The IRS allows you to claim your gambling losses as a deduction, as long as you don’t claim more than you won. In another scenario, let’s say you again won $10,000 playing Blackjack, but you wagered and lost $12,000. Your losses can't exceed your winnings, though. You would typically itemize deductions if your gambling losses plus all other itemized. You can claim your losses as “other itemized deductions: gambling losses” on Form 1040, Schedule. In that case, your gambling loss deduction is limited to $7,500. What if you don’t have enough deductions to itemize? Tough luck! Maybe. Also, the amount of gambling losses you deduct cannot be more than the amount of gambling income you reported on your return. Gambling winnings are fully taxable according to IRS regulations but gambling losses can be deductible up to the amount of your winnings if you choose to itemize deductions on your tax return. Some of the more common ones are:. You show the income,. Can I deduct gambling losses? Though your luck may have run out on your bets, there’s still good news regarding your taxes. If they do you want to have all paperwork ready to go that adds up to show the loss. 5% of your adjusted gross income (AGI). Gambling losses cannot be greater than gambling wins for the tax year. If you itemize deductions, you can deduct your gambling losses for the year on line 27, Schedule A (Form 1040). But you may be wondering if you can. To report your gambling losses, you must itemize your income tax deductions on Schedule A. The winnings will still show up as income. If you do not have enough in mortgage interest, property taxes, state income taxes paid, charitable contributions, medical expenses that exceed 7. The only requirements are that you cannot report more losses than your winnings, and you must have records to support your claim. Gambling winnings are reported on Form 1040 Schedule 1 on Line 8 as Other Income. You can deduct gambling losses only up to the extent of gambling winnings, and the losses can't exceed the winnings. Bookmark Icon. If you suffered gambling losses in 2022, you can deduct up to the amount of gambling income that you reported. However, these deductions may not exceed. Basically I got lucky and won two 777. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions. Claim your gambling losses on Form 1040, Schedule A, as a. Anything over can be carried over to future filings. If you don't have enough deductions to itemize, your screwed. For example, if you had $10,000 in long-term capital losses, $4,000. Itemize only. , you can deduct gambling losses, but only to the extent of your gambling winnings. The full amount of winnings must be reported as income, and the losses can be claimed as an an itemized deduction up to the amount of the winnings. Then there is MS, that charges a 3% nonrefundable tax to all nonresidents. Gambling losses are reported on Schedule A (the form for itemizing). In that scenario, you would be taxed on the $11K. Conversely, if you have $5,000 in losses, you can write off the entire $5,000. All deductions for expenses incurred in carrying out wagering transactions, and not just gambling losses, are limited to the extent of gambling. Therefore, if you lost $3,000 gambling, and won $1,000 of it back, only $1,000 can be deducted as a. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040)and kept a record of your winnings and losses. The deductions only apply to gambling profits. The deduction however, unlike the gambling deduction, is subject to the 2%. Finally, gambling losses can, in certain circumstances, trigger the dreaded Alternative Minimum Tax (AMT). “For example, if you have $5,000 in winnings but $8,000 in. 1 Solution. Filing Status 3 or 4: $2,110 for each spouse. You will still use Form 4684 to figure your losses and report them on Form 1040 , Schedule A. 2022 - $8,000 gain. However, you must be able to substantiate your gambling losses with proper documentation, such as. , you cannot reduce the gambling winnings by the gambling losses and report the difference. For example, if you reported $6,000 of gambling income and $8,000 of losses, you’d only be able to deduct $6,000. Also note that to report gambling losses, you must choose to itemize your deductions instead of taking the standard deduction. 12. If you're in the 22% federal tax bracket, you just saved $220. A W-2G form isn’t necessary in cases where: You have won no more than $1200 on slots; You have won up to $5,000 from poker;. How much do you need to itemize for 2021? That might sound like a lot of work, but it can pay off if your total itemized deductions are higher than the standard deduction. Colorado has a flat state income tax of 4. Say you've got a W2G of $4k which you report on your taxes. Itemize only. Gambling losses go on schedule A line 28 and are not subject to the 2% threshold. The Tax Court held that Coleman had substantiated that his gambling losses for 2014 were in excess of his gambling winnings, so he was entitled to the $350,241 gambling loss deduction. In the U. In making its decision, the court relied in part on the testimony of a gaming industry expert who testified on behalf of Coleman. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions. Losses: You can deduct gambling losses that don't exceed your winnings as itemized deductions using Schedule A (Form 1040), but you need to provide records. The amount of gambling losses you can deduct can never exceed the winnings you report as income. If you gamble at other times. You may deduct $10,000. Such receipts also come in handy if you itemize tax deductions and can deduct your gambling losses. In addition, you won’t be able to write off gambling losses unless you itemize your deductions . When you itemize, you can deduct your losses up to your winnings. Statements. California Lottery. Itemizing your deductions might benefit you if the amount. Those betting sites should be issuing you a tax form. The good news: Yes, gambling losses can be claimed as an itemized deduction on your taxes, but only up to the extent of your gambling winnings and only if you itemize. Since you lost $30k, you can itemize your deductions, file Schedule A, and prove to the IRS with a ledger and receipts that you lost $30k. They can not be deducted any where else on the return and can not be netted against (subtracted from) the W2G winnings before they are entered as misc. The deduction for gambling losses is found on Schedule A. However, for a casualty loss that is the result of certain federally declared disasters (Form IT-196, line. 4 standard deduction) If you netted winnings of $2,000 you’d have $39. Remember to keep proof of your losses. ” Refer to. You will then pay taxes on the $500 net profit if you can itemize. “Taxpayers can deduct gambling losses only up to the amount of their gambling. You can deduct gambling losses only up to the extent of gambling winnings, and the losses can't exceed the winnings.