Can I write off all my casino winnings if I'm down overall for the year?

The way gambling wins and losses work for taxes is a bit tricky. You have to report ALL of your gambling winnings as income on your tax return (on Schedule 1, line 8b). Then, you can deduct your gambling losses as an itemized deduction on Schedule A, but only up to the amount of your winnings. In your example, if you won $38k but lost $42k total, you would report the $38k as income, and then could deduct $38k (not the full $42k) of your losses on Schedule A. This means you need to itemize deductions rather than taking the standard deduction for this to benefit you. Keep in mind you need good records of both wins AND losses - session logs, receipts, tickets, statements, etc. The IRS can ask for documentation if they question your gambling activity.

I had this exact same situation last year and used https://taxr.ai to help me sort through all my gambling receipts and documentation. I was totally stressed about how to properly report everything since I had won about 25k in various jackpots but was actually down overall for the year. Their AI analyzed all my casino win/loss statements and helped me properly categorize everything. The system showed me exactly how to report the winnings as income and then deduct the losses as itemized deductions, plus it flagged that I was missing documentation for a few sessions that could have been questioned in an audit. Saved me a ton of time trying to figure out the rules.

Update: I just tried taxr.ai after posting my question and I'm honestly impressed. I was worried about my one $5,800 slot jackpot from last year since I never really tracked my losses well. The system guided me through creating a reasonable estimate of my gambling losses based on my bank statements and player's card history. The best part was it flagged that my jackpot was actually under the $5,000 reporting threshold so the casino wouldn't have issued a W-2G, but I still needed to self-report it. I wouldn't have known that specific rule. It also determined that in my case, I was still better off taking the standard deduction rather than itemizing since my other deductions weren't enough to exceed the threshold. Definitely worth checking out if you're dealing with any gambling income!

After struggling to get answers about my gambling deductions from the IRS (was on hold for hours multiple times), I tried https://claimyr.com and they got me through to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that I had to report all my jackpots as income (even the ones under $1,200 that didn't generate W-2Gs), but could only deduct losses up to the amount of winnings. She also clarified that I needed to have detailed records in case of an audit - just having the annual win/loss statement from the casino wasn't enough on its own. Really wish I'd known about this service earlier instead of wasting days trying to get through.

Well I've got to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I had gambling tax questions nobody could answer clearly. Their system actually did get me through to an IRS representative in about 20 minutes when I had previously wasted over 3 hours on hold across multiple attempts. The agent confirmed exactly what was mentioned earlier - I have to report all winnings as income but can only deduct losses up to the total winnings amount. She also explained I need to track each gambling session separately, not just my annual total. This was hugely helpful as I had been doing it wrong. Sometimes it's good to be proven wrong!

One important thing nobody mentioned yet: you can only deduct gambling losses if you ITEMIZE deductions on Schedule A. With the standard deduction being $12,950 for single filers (2025), many people won't benefit from itemizing unless they have significant other deductions like mortgage interest, state taxes, and charitable contributions. So if your total itemized deductions (including gambling losses) don't exceed your standard deduction, there's no tax benefit to claiming the gambling losses. This trips up a lot of casual gamblers who think they can just offset their winnings.

Just wanted to add something important about record-keeping. I went through an IRS audit last year because of my gambling activities and learned the hard way: they don't just accept the annual win/loss statement from the casino as proof of your losses! The IRS wants to see a detailed gambling log with: - Date and time of each gambling session - Name and address of gambling establishment - Type of gambling activity - Names of other persons present with you - Amounts won or lost Plus keep all supporting documents like receipts, tickets, bank statements, etc. I lost thousands in deductions because my records weren't detailed enough.