Hi, My AGI this year was $57000. I won $5000, on a lottery ticket. I also have $5,000 worth of gambling losses to claim when i Itemize deductions. Does theat completely wipe out any tax i would pay for the $5000? FIgured the tax bracket im in would be around $800 in taxes. So making it a $4000 check. Anywho, if i claim 5k in losses, will that completely wipe the taxes that would be paid on this amount?> Will this put me in a diff bracket? Please, i need to know this is causing an issue with family (Free money does that huh?) Thank you.
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Hi, My AGI this year was $57000. I won $5000, on a lottery ticket. I also have $5,000 worth of gambling losses to claim when i Itemize deductions. Does theat completely wipe out any tax i would pay for the $5000?==========>>>>>>>>>Correct; you do not need to pay any income tax on your gambling winnings of $5K; For example, if you won $5K, and lost $4K, your net position is a gain of $1,K. If you won $5Kbut lost $5K , your net position is $0. Just subtract losses from gains.

FIgured the tax bracket im in would be around $800 in taxes. So making it a $4000 check. Anywho, if i claim 5k in losses, will that completely wipe the taxes that would be paid on this amount?>========>>>>>>>> Correct. Aslongas the amount of loss is equal to the amount of winnings.Gambling losses are indeed tax deductible, but only to the extent of your winnings.
Will this put me in a diff bracket? Please, i need to know this is causing an issue with family (Free money does that huh?)==========>>>>>>Correct;UNLESS you deduct $5K by itemizing it(I mean UNLESS you have $5K worth of gambling losses ) your bracket may go up due to $5K,, an income increase; but by offsetting the gain by the loss, there is no change in your bracket as there is no income increase due to the loss claimed