How to Report Gambling Income and Losses

Finally, after 18 years, you can to join the army, call yourself an adult, and you can go to a casino and gamble. However, win or lose, did you know you have to report that money to the IRS on your tax return. Do you know where to report gambling winnings? In addition, what if you are a professional gambler is it all the same?

Where to report: Casual Gambler

If you are just going to the casino for some fun, and you have no intent on surviving on the winning you make then you are not a professional gambler. For a casual gambler you will report your winnings on line 21 of Form 1040, as “Other Income”. Now if you have a loss then you report that amount on Schedule A, Itemized Deductions Line 28, Gambling Losses.

This means that all income is reported, however losses from gambling are only helpful if you have enough to itemize your deductions. To understand more on itemized deductions versus the standard deduction look for our blog post, “Standard vs. Itemized deductions”

Where to report: Professional Gambler

Now if you are a gambler and carry out the activity in a businesslike manner and the winnings and losses effect how you are living you are a professional. This is now a trade or business to the IRS. You report your winnings and losses on the Schedule C, Self-Employed Income.

Professional gamblers can also deduct ordinary and necessary business expenses in addition to their wagering losses. However, wagering losses cannot exceed gambling winnings. This shows that once someone is a professional gambler, that person cannot take a loss on their taxes from the losses.

Going to the casino and gambling can be fun. From the slot machines to the poker tables, there are winners all around the room, and the smell of potential winnings is in the air. When filing your tax return for the year, just remember the winnings and losses need to be reported to the IRS. If you are in the casino as a profession and report income as self-employment income, or if you finally made it to the age to have some fun at a casino, filing the return is different.