Edward L. Armstrong, P.C. | Edward L. Armstrong
You can deduct gambling losses only if you itemize your deductions. The AMOUNT you deduct may not be more than the amount of gambling income reported on your return. You claim your gambling losses on Schedule A to Form 1040 as a "miscellaneous deduction NOT subject to the 2% limit." A non-resident of the United States cannot deduct gambling losses on Schedule A of Form 1040NR.
Answer Applies to: Missouri
Arthur H. Geffen, P.C. | Arthur Geffen
Here are the rules. The following rules apply to casual gamblers. Gambling winnings are fully taxable and must be reported on your tax return. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525 , Taxable and Nontaxable Income . A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. All gambling winnings must be reported on your Form 1040 (PDF), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505 , Tax Withholding and Estimated Tax. You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF), as a miscellaneous itemized deduction that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses on Schedule A of Form 1040NR (PDF). It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529 , Miscellaneous Deductions, for more information.
Answer Applies to: Texas