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Casual gamblers may lose big under new tax code

Casual gamblers may lose big under new tax code

The new tax law will cause many casual gamblers to incur bigger losses than before! Prior to 2018 you could deduct your losses up to the amount of your winnings. You did this by claiming your losses as itemized deductions. The new tax law for 2018 doubles the standard deduction. This will cause many taxpayers who previously itemized their deductions, to not itemize any more. Thus, you will report your winnings on the first page of your income tax return, but you won’t report your losses anywhere since you don’t itemize.

The tax code does allow you to net your losses with your winnings on a same day basis. If you win $500 on a slot machine on a Friday night but you spent $200 to win it, you would only report $300 of income for that day. However, if you lose $200 on a Friday night playing the slots but win $500 on Saturday, the result is much different. You will have to report the $500 as income and you can only claim your losses if you itemize your deductions.

No one other than a politician ever said the tax code was fair!