Gambling Tax Itemized Deductions
The Tax Cuts and Jobs Act of 2017 (TCJA) will have broad-ranging effects on all kinds of individuals. Taxpayers with a personal connection to gambling (i.e., recreational gamblers) or one in the form of a trade or business (i.e., professional gamblers) will find that the revisions to Internal Revenue Code (IRC) section 165(d) may have far-reaching consequences in the years before the. Under current federal and state law, gamblers can claim deductions on gambling losses, provided these are itemized on tax returns and do not exceed the amount of income from gambling reported. Gambling losses are deductible as an itemized deduction, but only if you itemize, and only to the extent of any gains. They are one of the few deductions not subject to the 2% limit that other miscellaneous itemized deductions are subject to. Still, if your standard deduction is greater than your itemized deduction, there is no benefit to.
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.”
Other Itemized Deductions
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 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.
Gambling Tax Itemized Deductions 2019
Gambling Losses Tax Itemized Deductions
Schedule A Deduction Plan
Gambling Tax Itemized Deductions Limits
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!