Gambling Tax Itemized Deductions

If you’ve been following us for a bit, you may have noticed that we’ve highlighted the most well-known deductions that can be itemized for your tax return: medical expenses, the SALT deduction, home mortgage deduction, charitable deduction, and casualty losses. There’s one more section left on that Schedule A form, “Other itemized deductions.”

Thanks to the Tax Cuts and Jobs Act, the standard deduction became much higher beginning with the 2018 tax year, and as a result, most Americans don't have enough itemized deductions to make the. Gambling Losses, Decedent Estate Taxes, and the Other Itemized Deductions by MiklosCPA Jan 31, 2020 Individual Tax If you’ve been following us for a bit, you may have noticed that we’ve highlighted the most well-known deductions that can be itemized for your tax return: medical expenses, the SALT deduction, home mortgage deduction.

Think about it this way. In order to deduct losses, you essentially have to “prove” you lost this money. The best way to show this proof is by reporting your total gambling income. Tax deductions also lower your overall tax liability. As a result, it is always wise to fully report income in order to claim as many tax deductions as possible. Also, you can only claim your gambling losses if you are able to itemize your tax deductions. Itemized deductions have to be more than the standard deduction which was raised to: $12,000 single, $24,000 married filing jointly.

Other Itemized Deductions

Gambling Tax Itemized Deductions Forms

What constitutes other itemized deductions? Before the Tax Cuts & Jobs Act (TCJA) of 2017, a long list of deductible expenses, mostly associated with business-related expenses, were allowable. The TCJA overhaul reshaped deductible expenses as we know it. Therefore, the list of allowable “other itemized deductions” shrank down to a significantly smaller list:

Gambling Tax Itemized Deductions Limits

• Gambling losses up to the extent of gambling winnings
• Casualty & theft losses from income producing property
• Federal estate tax on income in respect to a decedent
• Deduction for amortizable bond premium
• Ordinary loss attributable to a contingent payment debt instrument
• Deduction for repayment of amounts under a claim of right if over $3,000 (see pub 525)
• Certain unrecovered investment in a pension
• Impairment-related work expenses of a disabled person

If you’re curious, check out Publication 529 starting on page 3 for an exhaustive list of what is no longer deductible.

Schedule A Deduction Plan

Combining these other itemized deductions with the other Schedule A deductions will help you to claim itemized deductions as opposed to only claiming a standard deduction. Itemized deductions lower your taxable income and can potentially save you in taxes if you itemize properly. With some planning, taxpayers can rightfully claim itemized deductions. Here at MiklosCPA, we feel that sharing knowledge, such as available itemized deductions, empowers our clients to make effective decisions for their emerging businesses. Get a vision of how we can help your emerging business by giving us a call! Also, follow our socialmediapages for more “good-to-know” articles like this one and share that knowledge with your friends and associates!