Question – Are gambling losses Tax Deductible?
Example – You spent a few weekends in Vegas last year. One weekend, you won money. For the rest, your wallet came back a little worse for wear. Luckily gambling losses are tax deductible.
Answer – True or False?
The answer is TRUE.
You can deduct losses … but only to the extent of the gambling winnings you report as taxable income. And, while the law calls for all gamblers to report 100% of their winnings, only the 25% or so of taxpayers who itemize get the chance to deduct losses. Those who use the standard deduction don’t get this tax break.
One bright spot: Although gambling losses are considered miscellaneous expenses to be deducted on Schedule A of the Form 1040, this write-off is not restricted by the rule that generally allows miscellaneous expenses only to the extent they total more than 2% of your adjusted gross income. Gambling losses are deductible dollar for dollar, up to the amount of winnings reported.