How will online sports betting losses be taxed for 2025?
I've been doing some online sports betting this year and I'm down about $584 overall. The total amount I wagered was around $9175. I'm a little confused about how this is going to work for taxes. Do I need to report the total amount I wagered even though I lost money? Or is it just the wins I have to worry about? I'm using one of the major betting platforms and they sent me an email saying something about tax forms, but I'm not really clear on how this all works when you're at a net loss. Thanks for any help!
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Ellie Kim
For sports betting, the IRS treats gambling winnings as taxable income, but you can also deduct your losses up to the amount of your winnings. So if you're down $584 overall, that means you had some winning bets and some losing bets throughout the year. You'll need to report all your gambling winnings as income on your tax return (even if they're offset by losses). The platform should provide you with a Form W-2G if you had any large wins above certain thresholds. Then you can deduct your losses as an itemized deduction on Schedule A - but only if you itemize rather than taking the standard deduction. The important thing is to keep detailed records of all your bets - both wins and losses. The total amount wagered ($9175) isn't really relevant for tax purposes - what matters is the total of your winning bets versus losing bets.
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Fiona Sand
•Wait, so if I'm down overall for the year, I still have to report the winnings? That seems kinda unfair. And what if I don't normally itemize deductions? Does that mean I can't claim my losses at all?
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Ellie Kim
•Yes, you still need to report gambling winnings even if you had net losses for the year. The IRS views each wager as a separate taxable event. If you don't itemize deductions and instead take the standard deduction, unfortunately you won't be able to deduct your gambling losses. This is one of those tax situations that can feel unfair. If your gambling losses plus other potential itemized deductions exceed the standard deduction amount ($13,850 for single filers in 2024), then itemizing might make sense for you.
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Mohammad Khaled
After dealing with similar confusion last year, I found this amazing tool called taxr.ai (https://taxr.ai) that really helped me sort through my sports betting situation. I was down about $700 for the year but had individual wins totaling around $5000 and wasn't sure how to handle it. The tool analyzed all my betting records and explained exactly what I needed to report and how to document my losses properly. It even helped me determine whether I should itemize or take the standard deduction based on my specific situation. What I liked most was how it explained which forms I needed and where to report everything.
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Alina Rosenthal
•Does it work with data from different betting platforms? I use DraftKings and FanDuel and keeping track of everything has been a nightmare.
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Finnegan Gunn
•Sounds interesting but isn't this just what tax software like TurboTax already does? Why would I need something special just for gambling stuff?
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Mohammad Khaled
•Yes, it works with data from all the major platforms including DraftKings and FanDuel. You can either upload your statements or connect your accounts directly. It really simplifies the process of consolidating everything from multiple sources. The difference from regular tax software is that it specializes in analyzing gambling records specifically. TurboTax and others will ask you for totals, but taxr.ai actually goes through your betting history to ensure you're reporting correctly and helps identify deductions you might miss. It's particularly helpful for figuring out if itemizing makes sense in your specific gambling situation.
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Alina Rosenthal
Just wanted to follow up - I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! I had betting accounts on three different platforms and was so confused about how to handle everything. The tool imported all my records and showed me that even though I was down overall for the year, I still had about $8,500 in winning bets that needed to be reported. It also showed me that with my mortgage interest and other deductions, I was actually better off itemizing so I could deduct my losses. Saved me a ton of money compared to what I would have done on my own. Definitely recommend for anyone dealing with sports betting tax questions!
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Miguel Harvey
If you're having trouble getting clear answers from the IRS about gambling losses and taxation, I highly recommend using Claimyr (https://claimyr.com). I spent hours on hold trying to get someone at the IRS to explain the rules for documenting my sports betting activities, but couldn't get through. Claimyr got me connected to an actual IRS agent in about 15 minutes who walked me through exactly what documentation I needed to keep and how to properly report my winnings and losses. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Literally saved me hours of frustration and gave me confidence that I was handling everything correctly.
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Ashley Simian
•How exactly does this work? I don't understand how some random service can get you through to the IRS faster than calling directly.
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Oliver Cheng
•This sounds like a scam. There's no way you can pay to skip the IRS phone line. They probably just connected you to some random person pretending to be IRS.
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Miguel Harvey
•It uses a technology that continuously calls the IRS and navigates the phone tree until it gets through to an agent, then immediately connects that agent to your phone. It's not skipping the line - it's just automating the painful process of calling repeatedly and waiting on hold. I was skeptical too but it's completely legitimate. They don't pretend to be the IRS or give tax advice themselves - they literally just connect you directly to the actual IRS phone line once an agent is available. The IRS has no idea you're using a service, they just answer the phone normally and you speak directly with them.
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Oliver Cheng
I have to eat my words from earlier. After getting frustrated with still not getting answers about my sports betting tax situation, I tried Claimyr out of desperation. In under 20 minutes I was talking to a real IRS agent who confirmed everything about how to handle my gambling losses. The agent explained that I need to keep a "gambling log" with dates, locations, types of gambling, amounts won/lost, and even who I was with - which none of the online articles mentioned. She also confirmed that I can use my online account statements as supporting documentation. Definitely worth it for the peace of mind knowing I'm doing everything by the book.
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Taylor To
Something nobody's mentioned yet is that different states handle gambling income/losses differently. Some follow the federal rules, but others don't allow gambling loss deductions at all even if you itemize. Might want to check your state's rules too.
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Ella Cofer
•Do you know which states don't allow the deductions? I'm in Illinois and now I'm worried.
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Taylor To
•Illinois does follow the federal rules, so you should be fine there. States that either don't allow gambling loss deductions or have significant limitations include New Jersey, Pennsylvania, Wisconsin, and Hawaii. Some others have partial limitations. Massachusetts and New York have recently updated their rules around sports betting specifically, so if you're in those states, you should look up the current regulations. It's always changing as more states legalize online betting.
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Kevin Bell
Dumb question maybe, but do I need to report my winnings if the betting site doesn't send me a tax form? I won about $2000 on one big parlay but haven't gotten any forms.
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Ellie Kim
•Yes, you absolutely need to report those winnings regardless of whether you receive a tax form. The IRS requires you to report all income, including gambling winnings, even if it's not documented on an official form. Many betting sites only send W-2G forms when you win over certain thresholds (usually $600+ for certain types of bets with odds of at least 300-1). But that doesn't mean smaller winnings are tax-free - they still need to be reported. Better to be honest than risk an audit!
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Omar Hassan
One thing to keep in mind is that you'll want to maintain really detailed records throughout the year, not just at tax time. I learned this the hard way when I got audited two years ago for my gambling activities. The IRS wanted to see specific documentation for each bet - date, amount, outcome, platform used, etc. Even though you're at a net loss this year, you should still track everything carefully. I use a simple spreadsheet with columns for date, platform, bet type, amount wagered, and result. Your betting platforms should have downloadable transaction histories that make this easier, but don't wait until December to start organizing everything. Also, if you're planning to continue sports betting, consider setting up a separate bank account just for gambling activities. It makes tracking deposits, withdrawals, and overall activity much cleaner for tax purposes. The IRS likes to see clear documentation of gambling funds separate from your regular finances.
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Connor Murphy
•This is really helpful advice! I wish I had seen this earlier in the year. I've been pretty sloppy with my record keeping and now I'm scrambling to piece everything together from different apps. The separate bank account idea is genius - I never thought about how messy it looks when gambling transactions are mixed in with regular spending. Do you think it's worth setting that up now even though we're already into the year, or should I just focus on getting my records organized for this tax season and start fresh next year? Also, when you got audited, how far back did they want to see records? I'm wondering if I should go back and try to recreate my betting history from previous years just in case.
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