How do I report gambling winnings and losses on my tax return?

All gambling winnings are taxable income — the IRS requires you to report every dollar won, regardless of whether you receive a tax form. Here's the complete breakdown:

Reporting winnings:

• Report all gambling winnings on Schedule 1 (Form 1040), Line 8b as "Other Income"
• Winnings above certain thresholds trigger a Form W-2G from the casino or gambling establishment:
• Slot machines/bingo: $1,200+
• Keno: $1,500+
• Poker tournaments: $5,000+
• All other wagers (horse racing, sports bets): $600+ AND at least 300:1 odds
• Even winnings below these thresholds are taxable — you just won't receive a W-2G

Deducting losses:

• You CAN deduct gambling losses, but ONLY if you itemize deductions on Schedule A
• Losses are deductible up to the amount of your winnings — you cannot create a net gambling loss
• Example: If you won $8,000 and lost $12,000, you report $8,000 in income and deduct $8,000 in losses (not $12,000)
• Report losses on Schedule A, Line 16 (Other Itemized Deductions)

This creates a common trap: If you take the standard deduction ($14,600 for single filers in 2024), you CANNOT deduct your gambling losses. You still owe tax on your winnings. Many recreational gamblers end up paying tax on their gross winnings without any offset for losses.

Professional gamblers:

If gambling is your trade or business (a very high bar per IRS standards), you report on Schedule C and can deduct losses against winnings as business expenses. You may also deduct business-related expenses (travel, entry fees, subscriptions). However, the IRS and courts have strict criteria — factors include regularity, business-like conduct, and whether you depend on gambling for your livelihood.

Documentation requirements:

The IRS expects you to maintain a gambling diary or log that includes:

• Date and type of wagering activity
• Name and address of the establishment
• Names of people with you (for verification)
• Amounts won and lost per session
• Keep all W-2G forms, losing tickets, canceled checks, credit card records, and casino player's card statements

State taxes: Most states also tax gambling winnings. Some states (like Connecticut and Illinois) allow you to offset wins with losses; others don't. Check your state's rules.