To prove gambling losses on your taxes, just keep records like receipts, tickets, or even a simple diary of your bets. You can only deduct them if you itemize and have winnings to match.
Let’s go over what kind of records actually work and how to keep things simple.
Why You Need to Keep Records
If you’re planning to deduct gambling losses, you’ll need proof. The IRS won’t just take your word for it. That means keeping track of every bet, win, and loss.
Without records, you can’t claim anything, and you might end up paying more in taxes than you should.
You Can’t Deduct More Than You Win?
Yes. Losses are only deductible up to the amount you’ve won. So, if you won $5,000 this year but lost $6,000, you can only deduct $5,000. That extra $1,000? You can’t write it off.
Keeping records helps you stay accurate and avoid issues when filing taxes. If the IRS ever asks how you got your numbers, you don’t want to guess.
Next, let’s talk about what kind of proof works best.
What Counts as Proof?
When it comes to proving your gambling losses, not just anything will do. The IRS requires clear proof of your losses, so it’s important to keep good records all year.
Here’s what you’ll need to track and keep on hand:
1. Receipts, Tickets, and Bank Statements
Start with the basics. I’m talking about receipts, tickets, and bank statements. Whenever you gamble, whether at a casino or online, save any receipts or tickets you get.
These show exactly how much you spent.
If you withdrew money to gamble or made a deposit, keep a record of that too. Bank statements are great for this. They can show when you transferred money or took cash out for gambling.
These simple documents create a clear record of your gambling activity.
2. A Gambling Diary
Receipts and tickets are helpful, but they might not capture every detail. That’s where a gambling diary proves useful. In this diary, write down the date, where you were, and how much you won or lost.
You can also note other important details, like whether you were playing blackjack at a casino or betting online.
For example, instead of just writing “lost $200,” note something like “April 15th, 2025 – Lost $200 at Casino XYZ playing blackjack.”
The more specific you can be, the better.
3. Casino Win/Loss Statements
Many casinos provide win/loss statements at the end of the year. These are incredibly useful. They show how much you won and how much you lost at that specific casino. If you gamble regularly at a casino, ask for one at the end of the year.
If they don’t give you one, simply ask for it.
These statements are great because they provide everything in one place. The casino tracks your activity, and they make it easy to see how much you lost or won.
Plus, the IRS accepts these official records.
Easy Ways to Track Your Gambling Losses
We have seen what proof you need. Now, how do you keep everything organized without it feeling like a chore?
➡ Use a Simple Notebook or an App
You don’t need anything fancy.
A small notebook works just fine. Just write down the date, where you gambled, how much you won or lost, and any other details. Keep it short and to the point.
If you prefer digital, a notes app on your phone works just as well. Some gambling apps even let you track your bets automatically, which can save you time.
The trick is to stay consistent. If you only record things once in a while, you might forget important details.
➡ Save Digital Copies of Receipts and Bank Transactions
Paper receipts can get lost easily, so it’s a good idea to keep digital copies. Just take a picture of any gambling receipts or tickets and save them in a folder on your phone or computer.
If you use online gambling sites, download your transaction history regularly. Bank statements are another easy way to keep track. If you make a deposit or withdrawal for gambling, highlight it or move it into a separate folder.
For those who gamble regularly, having paystubs can also help create a clear financial record. If gambling is part of your income, pay stubs show your earnings in an organized way, making tax filing easier.
This way, you always have proof ready if you need it.
Filing Your Taxes the Right Way
Keeping records is important, but filing your taxes correctly is what really matters. If you don’t do it right, you could miss out on deductions or even get audited.
Let’s go step by step.
Step 1: Report All Gambling Winnings
Before you can deduct losses, you need to report your winnings. Any money you make from gambling whether it’s from a casino, online betting, or even a friendly poker game must be reported as income.
If you win big, the casino or gambling platform might send you a Form W-2G, which reports your winnings to the IRS.
But even if you don’t get this form, you still have to report all your winnings on Form 1040 under “Other Income.”
Here’s an illustration.
If you won $7,000 from different bets throughout the year but never got a tax form, you still need to add that $7,000 as income.
Step 2: Itemize Your Deductions
You can’t deduct gambling losses if you take the standard deduction.
Instead, you have to itemize them on Schedule A of Form 1040. This means listing out your deductions one by one, including your gambling losses.
If your total deductions (including gambling losses) are higher than the standard deduction, itemizing could lower your tax bill.
If not, you might be better off taking the standard deduction instead.
Step 3: Deduct Only Up to Your Winnings
This is important.
As we have talked about it earlier, you can’t deduct more than you won. If you had $8,000 in losses but only won $5,000, you can only deduct $5,000. That extra $3,000 is just a personal loss, and you can’t write it off.
Let’s illustrate more.
You won $4,000 from a casino but lost $6,000 in bets throughout the year. When filing, you can only deduct $4,000, not the full $6,000
Step 4: Gather and Attach Proof
The IRS might not ask for proof right away, but if they do, you need to have it. If you can provide these documents we mentioned earlier, you’ll have no trouble proving your deductions.
Step 5: Double-Check and File
Before submitting your taxes, go through everything one last time. Make sure:
⦿ All winnings are reported.
⦿ You are itemizing deductions.
⦿ Losses don’t exceed winnings.
⦿ You have proper records in case of an audit.
If you’re unsure about anything, a tax professional can help. Filing correctly ensures you don’t overpay and keeps you out of trouble with the IRS.
Stay Organized and Make Tax Filing Easy
The IRS needs clear records, and without them, you could miss out on deductions. Keeping your documents organized is just as important as tracking your bets.
If gambling is part of your income, showing proof of earnings matters. This is where PaystubHero helps. With PaystubHero, you can create pay stubs that show steady income, making tax filing easier.
Instead of searching for lost receipts or statements, you’ll have clear, professional records ready when needed. Stay organized, avoid stress, and be prepared with PaystubHero.
FAQs
The most common questions on how to prove gambling losses on your taxes are:
