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Old 04-12-2017, 10:13 PM
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How to offset gambling win with losses?

I won 5000 dollars while gambling in 2016. The winning was reported to IRS. But overall, I lost 10000 dollars in 2016. So while filing tax, why my gambling deduction is not offsetting the gambling winning? The creditkarma tax system recommended to choose the standard deduction of 6400 vs itemized deduction of 5000(that was the max I could claim my losses). If I do not report gambling win, I owe around 250 dollars federal tax but when i report gambling win, I owe more than 1500. Since I lost more than what I won, I should not be owing any gambling tax right? I am confused. Please help. Thanks!



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Old 04-15-2017, 09:02 PM
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you can claim only up to $5K on SCh A of 1040 aslongas you itemize deductions on your return; Gambling losses are indeed tax deductible, but only to the extent of your winnings. This requires you to report all the money you win as taxable income on your return. However, the deduction for your losses is only available if you are eligible to itemize your deductions. If you claim the standard deduction, then you can't reduce your tax by your gambling losses



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