If you gamble, be sure you understand the tax consequences. Both wins and losses can affect your income tax bill. And changes under the Tax Cuts and Jobs Act (TCJA) could also have an impact.

• If you gamble, be sure you understand the tax consequences. Both wins and losses can affect your income tax bill. And changes under the Tax Cuts and Jobs Act (TCJA) could also have an impact.Wins and taxable incomeYou must report 100% of your gambling winnings as taxable income. The value of complimentary goodies (“comps”) provided.
• Gambling Losses You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040 or 1040-SR) PDF and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return.
• While you can deduct gambling losses, these deductions cannot exceed the amount of your total winnings. For example, if you win $1,000 playing the lotto, but you’ve purchased $2,000 worth of losing tickets, you can write off the losing tickets only up to the amount of your $1,000 winnings, and not the entire $2,000 you lost playing.

Now, you can only claim personal casualty losses if the damage is attributable to a disaster declared by the president. This change is in effect from 2018 through the end of 2025.

Wins and taxable income

You must report 100% of your gambling winnings as taxable income. The value of complimentary goodies (“comps”) provided by gambling establishments must also be included in taxable income as winnings.

Winnings are subject to your regular federal income tax rate. You might pay a lower rate on gambling winnings this year because of rate reductions under the TCJA.

Amounts you win may be reported to you on IRS Form W-2G (“Certain Gambling Winnings”). In some cases, federal income tax may be withheld, too. Anytime a Form W-2G is issued, the IRS gets a copy. So if you’ve received such a form, remember that the IRS will expect to see the winnings on your tax return.

Losses and tax deductions

You can write off gambling losses as a miscellaneous itemized deduction. While miscellaneous deductions subject to the 2% of adjusted gross income floor are not allowed for 2018 through 2025 under the TCJA, the deduction for gambling losses isn’t subject to that floor. So gambling losses are still deductible.

But the TCJA’s near doubling of the standard deduction for 2018 (to $24,000 for married couples filing jointly, $18,000 for heads of households and $12,000 for singles and separate filers) means that, even if you typically itemized deductions in the past, you may no longer benefit from itemizing. Itemizing saves tax only when total itemized deductions exceed the applicable standard deduction.

Also be aware that the deduction for gambling losses is limited to your winnings for the year, and any excess losses cannot be carried forward to future years. Also, out-of-pocket expenses for transportation, meals, lodging and so forth can’t be deducted unless you qualify as a gambling professional.

And, for 2018 through 2025, the TCJA modifies the limit on gambling losses for professional gamblers so that all deductions for expenses incurred in carrying out gambling activities, not just losses, are limited to the extent of gambling winnings.

Tracking your activities

To claim a deduction for gambling losses, you must adequately document them, including:

1. The date and type of gambling activity.
2. The name and address or location of the gambling establishment.
3. The names of other persons (if any) present with you at the gambling establishment. (Obviously, this is not possible when the gambling occurs at a public venue such as a casino, race track, or bingo parlor.)
4. The amount won or lost.

Can You Still Write Off Gambling Losses In 2018 Tax

You can document income and losses from gambling on table games by recording the number of the table you played and keeping statements showing casino credit issued to you. For lotteries, you can use winning statements and unredeemed tickets as documentation.

Please contact us if you have questions or want more information about the tax treatment of gambling wins and losses.

Can You Deduct Gambling Losses In 2018

© 2018

With all the changes in the new tax law, you may not know what expenses you’re still allowed to deduct. Fortunately, we have you covered. Here is a list of tax deductions you may have thought got the axe but are still available for your 2018 tax return.

Medical Expenses

The medical expense tax deduction is still available and will increase to 10 percent of your adjusted gross income. Qualifying medical expenses include doctor bills, prescriptions, insurance premiums under certain circumstances, newborn expenses, related travel expenses and more. You can even deduct the cost of service animals including purchase, training, feeding, grooming and veterinary care.

Gambling Losses

Gambling losses can still be included as miscellaneous tax deductions, but the definition of gambling losses has been broadened to include other expenses related to gambling activities, such as travel to and from a casino or track. You can only deduct losses up to the amount of your winnings, so any excess loss can’t offset other highly taxed income.

According to the IRS, taxpayers must compile the following in a log or other record:

• The date and type of each wager or wagering activity.
• The name and location of the gambling establishment.
• The names of any other person accompanying you to the gambling establishment.
• The amount you won or lost.

Alimony and Legal Fees

Alimony payments made under divorce or separation instruments that are executed after December 31, 2018 will no longer be deductible, and recipients of affected alimony payments will no longer have to include them in taxable income. But if your divorce was executed before the cut off, alimony is still deductible. Divorce-related legal fees may also be deductible by the party seeking alimony if the legal fees are incurred while disputing alimony rights.

Home Office Deduction

You may still be able to deduct some expenses for the business use of your home if there is a part of it that you use regularly and exclusively for work. To qualify, your home must also be your principal place of business, so even daycare providers and certain other businesses may take this deduction.

Health Savings Account Contributions

A Health Savings Account (HSA) is funded with pre-tax money, so it can still create tax deductions plus potential retirement savings. That money can be used tax-free for qualifying healthcare expenses, such as doctor visits, dental work, eyeglasses and more. HSA contribution limits will rise to $3,500 for individuals and $7,000 for families, and those 55 or older can contribute an additional $1,000. You’ll still need to have a qualifying high-deductible health insurance plan to contribute to an HSA, and you generally must not have any other health coverage.

No matter how the new tax laws affect your tax situation, ezTaxReturn can help you maximize your deductions and receive the biggest tax refund possible. The whole process is quick and easy as we ask about life events and other relevant information to help you take advantage of every credit and deduction the law allows.