Are Gambling Losses Still Tax Deductible in 2026?

The following is a practical overview of the rules and common questions for taxpayers in Fort Lauderdale, Wilton Manors, Broward County, and South Florida.

Can You Deduct Gambling Losses?

Yes, but federal law now generally limits wagering-loss deductions to 90% of eligible losses, and no more than gambling winnings, beginning with the 2026 tax year. Recreational gamblers typically must itemize deductions to claim losses.

Why the 90% Rule Matters

Consider a recreational gambler with $20,000 in winnings and $20,000 in substantiated losses. If the full 90% limitation applies and the taxpayer itemizes, only $18,000 in losses may be deductible, leaving $2,000 of gambling income after the deduction even though actual activity broke even.

What if You Lost More Than You Won?

The deductible amount is generally the lesser of 90% of eligible losses or the winnings amount. For example, $10,000 in winnings and $10,500 in losses yields a 90%-of-losses figure of $9,450, potentially leaving $550 after the deduction even though actual net gambling results were negative.

Reporting Winnings and Sports Betting

Gambling winnings generally must be reported whether or not the taxpayer receives Form W-2G. Sports wagering losses can be subject to the same limitation. Reporting the net sportsbook balance as zero is generally not a substitute for properly reporting winnings and deductible losses.

Keep Detailed Records

Maintain wagering logs, betting tickets, casino records, online sportsbook transaction histories, Form W-2G, and related support. A single annual win-loss summary may not establish every item required for tax reporting.

Frequently Asked Questions

Can you deduct 100% of losses in 2026? Generally no under current law. Can you owe tax after breaking even? Yes. Is a W-2G required before winnings become taxable? No. Does Florida impose state individual income tax? No, but federal rules still apply.

Tax Help in South Florida

At James Ridout CPA, we help individuals, families, and business owners review tax eligibility, plan for changing rules, and file accurate federal returns. Our office is in Wilton Manors, serving Fort Lauderdale and surrounding South Florida communities.

Schedule a Consultation with James Ridout CPA: https://www.jamesridoutcpa.com/schedule-consultation