Writing Off Gambling Losses on Your 2023 Taxes

Updated for tax year 2023.

Betters understand the concept of win some, lose some. But the IRS? They’re going to want exact numbers.

At a glance:

• Report all gambling winnings as taxable income on your tax return.
• If you itemize deductions, you can offset your winnings by deducting gambling losses.
• Casinos send a W-2G form to the IRS for winnings above specific thresholds ($600 or more for most games).

Specifically, your income tax return should reflect your total year’s gambling winnings, from the big blackjack score to the smaller fantasy football payout. That’s because you must report each stroke of luck as taxable income — big or small, buddy or casino. Thankfully, if you itemize your deductions, you can offset your winnings by writing off your gambling losses. 

It may sound complicated, but TaxAct^® will walk you through the entire process of filing taxes on gambling winnings and losses from start to finish. That way, you leave nothing on the table. 

What is a W-2G form? Should I have one?

A W-2G is an official withholding document. A casino or other professional gambling establishment typically issues it. You may receive a W-2G onsite when your payout is issued or one in the mail after the fact.

Gaming centers must issue W-2Gs by Jan. 31. When they send yours, they also shoot a copy to the IRS, so don’t roll the dice and make sure you report those winnings as taxable income.  

Don’t expect to get IRS Form W-2G for the $6 you won playing the Judge Judy slot machine. Withholding documents are triggered by the amount won and the type of game played.

How much can you win at a casino without paying taxes?

If you receive $600 or more in gambling winnings, the payer should issue you Form W-2G, but if you win more than $5,000, the payer could withhold 24% for federal income taxes (backup withholding).

Can I write off gambling losses?

You can deduct gambling losses if you itemize your deductions on your tax return, but you cannot deduct more than the gambling income you received. You’ll need a record of your winnings and losses to do this.

How much can I deduct in gambling losses?  

You can report as much as you lost in 2023, but you cannot deduct more than you won.

Remember, you can only do this if you’re itemizing your deductions. If you’re taking the standard deduction, you aren’t eligible to deduct your gambling losses on your tax return, but you are still required to report all your winnings. Cash and noncash winnings are both taxable. 

Where do I file this on my tax forms?

Let’s say you took two trips to Vegas this year. During Trip A, you won $6,000 in poker. During Trip B, you lost $8,000. You must list each individually, with the winnings noted on your return as taxable income and the loss as an itemized deduction in Schedule A. In this instance, you won’t owe tax on your winnings because your total loss is greater than your total win by $2,000. However, you do not get to deduct that net $2,000 loss, only the first $6,000.

Now, let’s flip those numbers. Say in Trip A, you won $8,000 in poker. In Trip B, you lost $6,000. You’ll report the $8,000 win on your return, the $6,000 loss deduction on Schedule A, and still owe taxes on the remaining $2,000 of your winnings.   

Are bank statements proof of gambling losses?

You can use your bank statements as proof of gambling losses if they are listed separately and not a combined number.

When will I get a W-2G form? 

You can expect a form W-2G if you win:

• $1,200 or more on slots or bingo
• $1,500 or more on keno
• $5,000 or more in poker tournaments
• $600 or more on other games, such as horse racing, but only if the payout is at least 300 times your wager

Federal taxes are withheld at a flat rate of 24% if your winnings are reported on a Form W-2G. If you didn’t give the payer your tax ID number (Social Security Number), the withholding rate is also 24%. 

Tip: Withholding only applies to your net winnings, which is your payout minus your initial wager. 

What kinds of records should I keep?

Keep a journal with lists, including each place you’ve gambled, the day and time, who was with you, and how much you bet, won, and lost. You should also keep receipts, payout slips, wagering tickets, bank withdrawal records, and statements of actual winnings. You may also write off travel expenses associated with loss, so hang on to airfare receipts.

You can use TaxAct to file your gambling wins and losses. We’ll walk you through the process and help you report any winnings and deduct losses, if applicable.

This article is for informational purposes only and not legal or financial advice.

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