tax law, people who gamble recreationally (i.e., not as professionals) are permitted to deduct their losses. If you’re a gambler, it is far more likely that you will lose money than it is that you will strike it big. Gambling can be a lot of fun, but the saying “the house always wins” exists for a reason. In 2016 alone, nearly $ 120 billion was lost in American casinos. If you find yourself facing this type of audit, a seasoned IRS audit lawyer can defend you and protect your rights. While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit.
Gambling losses are often a trigger for IRS audits because most people don’t keep careful records of how much they lost while at the casino, racetrack, or another gambling establishment.
However, if you don’t keep good records, you could find yourself facing an IRS gambling losses audit. To offset these winnings, you can list your annual gambling losses on Schedule A of your tax return. Gambling winnings are considered taxable income, which means that you must report them as such for purposes of both federal and state income taxes. But how does your gambling affect your taxes? Perhaps you hit Atlantic City or even Vegas a few times a year, having fun while winning a few bucks. If you’re like many Americans, you enjoy gambling.
