How to Deduct Gambling Losses and Report Gambling Income

A lot of people assume gambling is an off-the-books type of activity, but gambling losses and wins count as income and expenditures, both of which the IRS is interested in.

In this video, we’ll go over some tips for deducting your gambling losses and income.

1. Start by Reporting

In order to write off your gambling losses, you will have to accurately report the amount of money you made from gambling in a given year. You essentially have to prove you lost this money.

The best way to show this proof is by reporting your total gambling income.

2. Keep a Diary

The IRS requires frequent gamblers to keep track of all their winnings and losses.

First things first, you’ll want to date every gambling experience. You’ll also want to list the address of the place you’ve gambled, as well as the type of gambling itself.

Detail how much money you’ve won and lost per gambling experience. You may even want to list who was with you when you gambled and the form of the transactions, like cash, card, check, etc.

3. Know What Qualifies

The IRS describes gambling losses or winnings quite broadly. In general, these refer to any cash earned or lost in raffles, lotteries, poker, casino games, and sports betting, including horse races.

Most people assume gamb