You cannot deduct gambling losses without itemizing. The IRS treats gambling losses as an itemized deduction on Schedule A, so if you take the standard deduction, every dollar of winnings is taxed with no offset for the money you lost. There is one narrow exception — professional gamblers who report gambling as a trade or business on Schedule C — but the bar for that status is high, and it carries its own tax costs. For everyone else, the only way to write off gambling losses is to give up the standard deduction and itemize.
Why the Standard Deduction Blocks the Write-Off
Gambling losses live on Schedule A. Winnings go on Schedule 1 as income, which flows to your Form 1040 whether you itemize or not.1Internal Revenue Service. Topic No. 419 Gambling Income and Losses You do not get to net your wins against your losses and report only the difference. The IRS requires the full winnings figure on the income side, and losses come off only if you itemize.2Internal Revenue Service. Publication 529 – Miscellaneous Deductions
Even when you do itemize, the deduction is limited to your total reported winnings for the year. Win $12,000 and lose $18,000, and you can deduct at most $12,000. The extra $6,000 disappears — no carryforward, no net loss.1Internal Revenue Service. Topic No. 419 Gambling Income and Losses
The New 90% Cap Starting in 2026
Beginning with tax years starting in 2026, the One Big Beautiful Bill Act amended 26 U.S.C. § 165(d) to limit the gambling loss deduction to 90% of losses, still capped at total winnings.3Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses
The effect is easiest to see with a break-even year. Win $10,000, lose $10,000, and under the old rules you could deduct the full $10,000, wiping out the gambling income. Under the new rule, you can deduct only $9,000, and you owe tax on $1,000 of gambling income even though you walked away with the same amount you started with.
The 90% cap sweeps in more than just wagers. The statute defines “losses from wagering transactions” to include any deduction incurred in carrying on a wagering transaction, so the limit reaches gambling-related expenses too, not only the money put down on bets.3Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses
When Itemizing Actually Beats the Standard Deduction
Whether the loss deduction is worth chasing depends on your total itemized deductions, not just gambling losses. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married filing jointly, $16,100 for married filing separately, and $24,150 for head of household.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments from the One, Big, Beautiful Bill Itemizing only pays off when your combined deductions exceed those numbers.
The categories that usually matter alongside gambling losses:
- State and local taxes, capped at $40,000 for most filers ($20,000 for married filing separately) under 2026 rules, with a phaseout at higher incomes that can reduce the cap to $10,000.5Internal Revenue Service. Deductible Taxes
- Mortgage interest on up to $750,000 of home acquisition debt.
- Charitable contributions, with cash gifts deductible up to 60% of AGI.
- Gambling losses, limited to 90% of losses and capped at winnings.3Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses
Run the numbers. A single filer with $8,000 in state and local taxes, $5,000 in mortgage interest, and $6,000 in allowable gambling losses lands at $19,000 in itemized deductions — $2,900 more than the $16,100 standard deduction, so itemizing wins. A single filer whose only real deduction is $10,000 in gambling losses is stuck at $10,000, well short of the standard deduction. That filer takes the standard deduction and gets no benefit from the losses at all.
This is where most recreational gamblers land. Without meaningful state taxes, mortgage interest, or charitable giving to add to the pile, gambling losses on their own rarely clear the standard deduction threshold.
The AGI Problem Itemizers Still Face
Even when itemizing lets you deduct your losses, the winnings still hurt in ways the deduction cannot fix. Winnings raise your adjusted gross income, but the loss deduction sits below AGI on Schedule A. Your AGI stays inflated no matter how much you write off on the itemized side.
AGI is the gatekeeper for a long list of tax benefits. A higher AGI can shrink or eliminate the child tax credit, the earned income tax credit, education credits, and the medical expense deduction (which only covers costs above 7.5% of AGI). If you get health insurance through the ACA marketplace, gambling winnings baked into your AGI can cut your premium tax credit and leave you repaying part of it at filing time.
Retirees on Medicare feel this most sharply. Part B premiums are income-adjusted, and a jump in AGI from gambling winnings can push you into a higher IRMAA bracket. For 2026, a single Medicare beneficiary with modified AGI above $109,000 pays an extra $81.20 per month, with surcharges rising to $487.00 per month above $500,000.6Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles IRMAA looks at AGI, not taxable income after itemized deductions, so a break-even gambling year can still cost you real money in Medicare premiums.
The Professional Gambler Exception
There is one path that lets you offset gambling income without itemizing: qualifying as a professional gambler. Professionals report winnings and losses on Schedule C, and losses reduce gambling income directly on the business return rather than moving over to Schedule A.
The standard for professional status comes from Commissioner v. Groetzinger: gambling must be pursued full time, in good faith, with regularity, and as your primary livelihood, not as a hobby.7Legal Information Institute. Commissioner of Internal Revenue v. Groetzinger Weekend poker while holding a day job does not qualify. The IRS is looking for a sustained, business-like commitment.
Professional status is not a free pass. Net Schedule C gambling profits are subject to self-employment tax at 15.3%, covering both halves of Social Security and Medicare. The 2026 amendment to Section 165(d) applies to professionals too: combined losses and business expenses (travel, lodging, subscriptions, training) are capped at 90% of gambling winnings, and you cannot show a net gambling loss on Schedule C.3Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses In exchange, professionals can deduct legitimate business expenses, earn Social Security credits, and contribute to self-employed retirement plans.
Records You Need if You Plan to Deduct
The IRS puts the burden of proof on you. Estimates pulled together at year-end do not survive an audit. You need a contemporaneous diary or log kept throughout the year, with specifics for each session.1Internal Revenue Service. Topic No. 419 Gambling Income and Losses
At minimum, the log should record:
- The date and type of activity — what you played, which machine or table, which race or event.
- The location, including the name and address of the casino, track, or online platform.
- The amounts won or lost in each session.
- The names of anyone who was with you at the time.8Internal Revenue Service. Diary or Similar Record
Hold on to the supporting paper too: Forms W-2G, wagering tickets, canceled checks, credit card records, bank withdrawal slips from casino ATMs, and win/loss statements from casinos.8Internal Revenue Service. Diary or Similar Record Casino players’ club statements help, but the IRS treats your own log as the primary record. This is the piece most gamblers skip, and it is where most loss deductions collapse under audit.
State Taxes Can Be Worse
Federal treatment is only part of the picture. Several states — Connecticut, Illinois, Indiana, and Ohio among them — do not allow any deduction for gambling losses on state returns, even for taxpayers who itemize federally. In those states, you pay state income tax on the full winnings with no offset at all. Other states impose their own caps that differ from the federal rules. If you gamble and live in a state with income tax, check the state’s treatment before you assume your federal deduction carries over.
What This Means in Practice
For most recreational gamblers, the answer to the deduction question is a hard no. You cannot deduct losses without itemizing, most people’s total deductions fall short of the standard deduction, and the 2026 change shrinks even the itemized deduction to 90% of losses. The practical move is to keep clean session records regardless. Good records give you the option to itemize in a year when your other deductions run high, and they protect you if the IRS questions a return. Without them, the choice is made for you.