Don’t Bet on Taxes! Learn if Gambling Losses Are Deductible

Someday, you are going to hit it big via gaming. It doesn’t matter whether you are simply engaging in it as a hobby or taking it seriously. But before that happens, it is important to be armed with relevant information concerning gambling losses and winning. The payment of taxes is one of the most vital duties an individual must carry out. There are only very few scenarios where payment isn’t made compulsory. So, are gambling losses deductible? Is it one of the few cases where a tax isn’t paid? 

We will provide the answers to these questions in today’s casino news. Make sure you read to the end. Let’s go! 

Are Gambling Losses Deductible? Defining Losses First

Gambling losses, as defined by the law, are the total amount of money lost over time on any type of gambling that is allowed. The following activities allow a tax filing statement of gambling losses to be submitted: casinos, video poker online, table games, raffles, bingo, slot machines like the Royal Demeanor Slot, lotteries, dog and horse races, etc. 

The Internal Revenue Service (IRS) gives the final say in taxes. And according to the body, gambling losses are deductible, but only to the extent of your winnings. If your losses exceed your winnings, gambling losses cannot be deducted. 

Therefore, to avoid one of the common mistakes online casino gamblers make, keep an updated record of all your online casino real money gambling losses and winnings. Gaming tickets, receipts, etc., are important for the proper recording of losses and winnings. 

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Documenting Gambling Losses and Winnings 

Accurate documentation of gambling should show the following records: 

• The date and categories of online casino games or activities engaged in
• The name and the address of the establishment where the gambling activities took place
• The names of other individuals who were present with you at the gambling outlet or establishment
• The amounts lost or won 

In addition to the above, other documentation that must be kept includes: 

• Form W-2G, reporting gambling winnings and any income tax withheld 
• Form 5754 if the person receiving a gambling payout is not the actual winner or is among a group of people sharing the payout
• Tickets used to wager 
• Canceled checks, if any
• Substituted checks 
• Bank withdrawals 
• Credit records
• Any payment receipts or slips given to you by the gambling establishment

How Gambling Losses Are Deducted 

Are gambling losses deductible? Yes! But in gambling terms, they can’t be deducted if your loss is more than your winnings. Also, you cannot report the difference between your gambling top casino games winnings and losses. Your records must clearly show your winnings and losses separately. 

Individual gambling losses that are deductible are reported as miscellaneous itemized deductions on IRS Schedule A (Form 1040). They are not subject to the adjustable two percent gross income floor. 

In itemizing your gambling losses, you must include the real costs of your wager and any incurred expenses linked to the carrying out of the gambling activity. For example, the travel cost to and from the establishment. 

Limitations

There are still certain limitations to deducting gambling losses. Different rules apply if you are a full-time gambler, i.e., deep into the gambling business. Also, deductible gambling losses can vary from one state to another. Each state has its tax regulators; therefore, other specific rules can apply to gambling losses. And finally, if you are a Nonresident alien, i.e., not a U.S. citizen, the deduction of gambling losses by you is not permitted.

Conclusion

Gambling losses are tax deductible, and since they are itemizable deductions, keeping track of all your gambling activities is crucial. If some records are missing, visit your preferred online casino to request win/loss gambling statements. Remember, tax cases are serious. So, if you are in the gambling business, consult a certified tax professional who can help you compile and notify you of any changes to gambling loss rules. Visit our game catalog to play casino games of any kind, and hone your online gambling skills to rule your favorite games in the best casino you’ll find: Slots Paradise Casino.

Let our casino guides light your way to your winnings, so you can deduct them from your taxes properly. Learn how to play your favorite games so you keep winning and collecting. Don’t forget to tell someone on social media!