The amount of losses you deduct can’t be more than the amount of gambling income you reported on your return. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and have kept a record of your winnings and losses. For additional information on withholding gambling winnings, please contact the office. Depending on the amount of gambling winnings, you may be required to pay an estimated tax on that additional income. Winnings that aren’t reported on a Form W-2G should also be included.
Gambling winnings are reported as “Other Income” on Schedule 1 of Form 1040 or Form 1040-SR. If you receive certain gambling winnings or have any gambling winnings subject to federal income tax withholding, you will be issued a Form W-2G, Certain Gambling Winnings. Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos, and also includes cash winnings and the fair market value of prizes, such as cars and trips. If you aren’t in the trade or business of gambling, you should be aware that gambling winnings are fully taxable and must be reported as income on your tax return.
