Article Posted on 10/12/2018
BAD NEWS FOR GAMBLERS THAT DON’T ITEMIZE
Because of the higher standard deduction created by the new tax law many taxpayers will be better off taxing the standard deduction rather than itemizing (sometimes called the “long form”). Since gambling losses are itemized deductions some taxpayers will lose.
On February 15, 2018, Leslie goes to the casino and wins $10,000 playing the slots. On November 20, 2018 she returns to the casino and loses $9,000. For the year she has netted $1,000.
Because the new law increased the standard deduction to $12,000 for singles and $24,000 for married filing jointly Leslie does not have enough deductions to itemize. The $9,000 loss would have been an itemized deduction.
Result – Leslie has $10,000 taxable income with no deduction.