November 12, 2021
As you may know, in the United State, if you have gambling winnings, whether you receive a W2 or not, you must report all of them as "Other Income" on your individual tax return. This rule is applicable even if you are a traveler or a nonresident alien in the United States for income tax purposes. On the other hand, in case you have any gambling losses, you may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040).
Below are some important things to remember when deducting your gambling losses.
The amount of deduction of gambling losses is up to the amount of winnings, i.e., no more than the amount of gambling income.
You have a record of your winnings and losses. Please see “Details of Record Keeping Requirement” later.
Your total itemized deduction is more than the standard deduction amount. e.g., if your filing status is single, the amount of standard deduction for 2021 is $12,550. Therefore, the total of your itemized deduction needs to be more than that amount. For other items to be listed on the itemized deduction, please refer to the following link to "2020 Taxpayer Planning: Standard vs Itemized Deductions: https://www.topc.us/single-post/2020-taxpayer-planning-standard-vs-itemized-deductions
Details of Record Keeping Requirement
Please see the examples below.
Horse racing: Whether your documents are a physical statement or an online statement, your record must include betting tickets, and/or receipts, which all need to show the date, race details, bet / purchase amount, and winning amount.
Casino: Major casino can provide the tax information statement if you are a member of player club. Otherwise, you can make your own record memo which needs to describe the venue, date, time, table, or slot machine (providing the number is preferable) and/or type of game and bet/wining amount for each detail.
Considering these requirements, it is essential to keep detailed records for accurate reporting of gambling losses.