NOT subject to 90% gambling loss limitation?
October 14th, 2026 at 5:38:54 PM
permalink
https://www.nsktglobal.com/usa/blog/report-gambling-winnings-w2g-schedule-1-2025
Professional gamblers are NOT subject to the 90% gambling loss limitation that applies to casual gamblers starting in 2026. As business income and expenses, professional gamblers continue to deduct 100% of gambling losses as ordinary business expenses on Schedule C.
hm.. Can't wait till this accounting firm's court cases (if any) to set precedence
Professional gamblers are NOT subject to the 90% gambling loss limitation that applies to casual gamblers starting in 2026. As business income and expenses, professional gamblers continue to deduct 100% of gambling losses as ordinary business expenses on Schedule C.
hm.. Can't wait till this accounting firm's court cases (if any) to set precedence
Last edited by: 100xOdds on Oct 14, 2026
Craps is paradise (Pair of dice).
Lets hear it for the SpeedCount Mathletes :)
October 14th, 2026 at 6:37:08 PM
permalink
I'm beginning to think the slot YouTubers don't have a 24% tax withholding on their big wins is because the win is still less than 300X their bet. They bet $500/spin and there's no withholding until they win $150,000 or more. They are also likely to be professional gamblers so they won't be affected by the 90% rule, but they'll have to pay a 15.3% self-employment income.
So a player could be hit two different ways.
$10 million of coin-in; $10.1 million of wins for a $100K profit:
Player A, casual gambler) Only gets a $9.09 million loss deduction and owes tax on $1.01 million income
Player B, Pro gambler) Gets 100% loss deduction and scores a $100K profit and pays a $15,300 self-employment tax for a pre-income tax win of $84,700.
Again, this will have to be fought in a Federal Appeals Tax Court for unconstitutional taxation on phantom income, and there's little reason to believe judges will override Congress.
******************************************************************************
Break Even Gambling in 2026 and the IRS Still Taxes You — Congress Just Moved to Fix It -
Vegas Decoded - 9.09K subscribers - Oct 2, 2026
https://www.youtube.com/watch?v=ccKByYVcxAo
The 90% gambling loss deduction rule took effect January 1, 2026: win $100,000, lose $100,000, and the IRS still counts $10,000 as income. On September 16 a House committee voted 38–5 to undo it.
This episode works through the math with real examples, traces how the change got into the 2025 tax law, shows who it lands on (poker pros and heavy players who itemize) and why most Las Vegas visitors were never able to deduct losses in the first place, covers the new $2,000 slot jackpot reporting line, and lays out what Congress still has to do before January. This is an explanation of the law, not tax advice.
What you’ll find out in this video:
• How the 90% rule taxes a break-even year, and even a losing one
• How the change entered the 2025 tax law and why the first fix stalled
• Why most Vegas visitors could never deduct losses anyway: the itemizing rule
• The slot jackpot tax-form line moved from $1,200 to $2,000 in 2026
• What has to happen in Congress before the repeal becomes law
*******************************************************************************
Another rule makes the $2,000 threshold go up by the amount of inflation each year. With 3.6% inflation, casinos would have to adjust their thresholds to $2,072 for 2027. But I've seen this before in other calculations where if the amount doesn't go up by $100, it doesn't go up at all, and it could be stuck at $2,000 until a 5% inflation year hit, or until the cumulative inflation hit 5% since 2026. The amount could go up in $100 increments over the years as they calculate the cumulative inflation since 2026. I don't really know, but I don't expect tax forms to be an odd amount such as $2,072.
*********************************************************************************
Even AI says: Professional gamblers include business expenses in the loss total, then apply the 90% cap.
Professional gamblers report gambling as a business on Schedule C and can deduct related business expenses, but the 90% cap now applies to those wagering losses and expenses too under the OBBBA changes.
https://us-tax-calculator.com/articles/gambling-lottery-winnings-tax/
If your losses exceed your winnings by more than 11.1%, it will erase the phantom income and you'd owe no tax on it, you'll get a full loss deduction up to your winnings.
So a player could be hit two different ways.
$10 million of coin-in; $10.1 million of wins for a $100K profit:
Player A, casual gambler) Only gets a $9.09 million loss deduction and owes tax on $1.01 million income
Player B, Pro gambler) Gets 100% loss deduction and scores a $100K profit and pays a $15,300 self-employment tax for a pre-income tax win of $84,700.
Again, this will have to be fought in a Federal Appeals Tax Court for unconstitutional taxation on phantom income, and there's little reason to believe judges will override Congress.
******************************************************************************
Break Even Gambling in 2026 and the IRS Still Taxes You — Congress Just Moved to Fix It -
Vegas Decoded - 9.09K subscribers - Oct 2, 2026
https://www.youtube.com/watch?v=ccKByYVcxAo
The 90% gambling loss deduction rule took effect January 1, 2026: win $100,000, lose $100,000, and the IRS still counts $10,000 as income. On September 16 a House committee voted 38–5 to undo it.
This episode works through the math with real examples, traces how the change got into the 2025 tax law, shows who it lands on (poker pros and heavy players who itemize) and why most Las Vegas visitors were never able to deduct losses in the first place, covers the new $2,000 slot jackpot reporting line, and lays out what Congress still has to do before January. This is an explanation of the law, not tax advice.
What you’ll find out in this video:
• How the 90% rule taxes a break-even year, and even a losing one
• How the change entered the 2025 tax law and why the first fix stalled
• Why most Vegas visitors could never deduct losses anyway: the itemizing rule
• The slot jackpot tax-form line moved from $1,200 to $2,000 in 2026
• What has to happen in Congress before the repeal becomes law
*******************************************************************************
Another rule makes the $2,000 threshold go up by the amount of inflation each year. With 3.6% inflation, casinos would have to adjust their thresholds to $2,072 for 2027. But I've seen this before in other calculations where if the amount doesn't go up by $100, it doesn't go up at all, and it could be stuck at $2,000 until a 5% inflation year hit, or until the cumulative inflation hit 5% since 2026. The amount could go up in $100 increments over the years as they calculate the cumulative inflation since 2026. I don't really know, but I don't expect tax forms to be an odd amount such as $2,072.
*********************************************************************************
Even AI says: Professional gamblers include business expenses in the loss total, then apply the 90% cap.
Professional gamblers report gambling as a business on Schedule C and can deduct related business expenses, but the 90% cap now applies to those wagering losses and expenses too under the OBBBA changes.
https://us-tax-calculator.com/articles/gambling-lottery-winnings-tax/
If your losses exceed your winnings by more than 11.1%, it will erase the phantom income and you'd owe no tax on it, you'll get a full loss deduction up to your winnings.
Last edited by: ChumpChange on Oct 14, 2026
October 14th, 2026 at 9:01:22 PM
permalink
I figure some gamblers are paying taxes quarterly already in 2026, so they should have already found out they are losing more than 11.1% on the slot machines on average.
************************************************************
$1,000 in Taxes Owed — Penalties and What to Do
If you owe $1,000 or more in federal taxes after subtracting withholding and refundable credits, the IRS may charge an underpayment penalty if you didn’t pay enough through withholding or estimated tax payments.
When the Penalty Applies
You can avoid the underpayment penalty if:
• You owe less than $1,000 in tax after subtracting withholding and refundable credits, or
• You paid at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if AGI > $150,000).
If you don’t meet these, the IRS calculates the penalty per quarter based on:
• How much you should have paid each quarter
• How much you actually paid
• The number of days the payment was late
How the Penalty Is Calculated
• Rate: 0.5% of the unpaid amount for each month or part of a month, up to 25% of the unpaid amount.
• Interest: Charged on the unpaid tax and penalty at the IRS short term rate plus 3%.
• Formula: The IRS uses Form 2210 to compute the penalty; it’s interest based, not a flat fee.
Example: If you owe $1,000 and didn’t pay any estimated tax, the penalty could be up to 25% of $1,000 ($250) plus interest, depending on how long it’s unpaid.
Other Penalties
If you also fail to file your return on time, a failure to file penalty (5% per month, up to 25%) may apply, reduced if you also have a failure to pay penalty.
How to Reduce or Avoid the Penalty
• Make estimated tax payments or adjust withholding before filing.
• Request a penalty and interest estimate from the IRS before filing to see if a payment can avoid the charge.
• Set up an approved payment plan — if you file on time and have a plan, the failure to pay penalty drops to 0.25% per month.
What to Do Now
1. Check your IRS notice for the exact reason and amount due.
2. Pay what you can now and apply for a payment plan if needed.
3. Consult a tax professional to review your situation, minimize penalties, and set up a payment arrangement.
Key takeaway: Owing $1,000 in taxes can trigger an underpayment penalty if you didn’t pay enough through withholding or estimated tax. The penalty is based on the shortfall, time unpaid, and can be reduced with timely payments or an approved plan. Acting quickly and setting up a payment arrangement can help limit the cost.
************************************************************
$1,000 in Taxes Owed — Penalties and What to Do
If you owe $1,000 or more in federal taxes after subtracting withholding and refundable credits, the IRS may charge an underpayment penalty if you didn’t pay enough through withholding or estimated tax payments.
When the Penalty Applies
You can avoid the underpayment penalty if:
• You owe less than $1,000 in tax after subtracting withholding and refundable credits, or
• You paid at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if AGI > $150,000).
If you don’t meet these, the IRS calculates the penalty per quarter based on:
• How much you should have paid each quarter
• How much you actually paid
• The number of days the payment was late
How the Penalty Is Calculated
• Rate: 0.5% of the unpaid amount for each month or part of a month, up to 25% of the unpaid amount.
• Interest: Charged on the unpaid tax and penalty at the IRS short term rate plus 3%.
• Formula: The IRS uses Form 2210 to compute the penalty; it’s interest based, not a flat fee.
Example: If you owe $1,000 and didn’t pay any estimated tax, the penalty could be up to 25% of $1,000 ($250) plus interest, depending on how long it’s unpaid.
Other Penalties
If you also fail to file your return on time, a failure to file penalty (5% per month, up to 25%) may apply, reduced if you also have a failure to pay penalty.
How to Reduce or Avoid the Penalty
• Make estimated tax payments or adjust withholding before filing.
• Request a penalty and interest estimate from the IRS before filing to see if a payment can avoid the charge.
• Set up an approved payment plan — if you file on time and have a plan, the failure to pay penalty drops to 0.25% per month.
What to Do Now
1. Check your IRS notice for the exact reason and amount due.
2. Pay what you can now and apply for a payment plan if needed.
3. Consult a tax professional to review your situation, minimize penalties, and set up a payment arrangement.
Key takeaway: Owing $1,000 in taxes can trigger an underpayment penalty if you didn’t pay enough through withholding or estimated tax. The penalty is based on the shortfall, time unpaid, and can be reduced with timely payments or an approved plan. Acting quickly and setting up a payment arrangement can help limit the cost.
October 15th, 2026 at 10:35:45 AM
permalink
If I divide $1,000 (the threshold for tax penalties when quarterly estimated tax payments are due) by 0.24 (24% tax rate), I get $4,166,67 of wins before I have to worry about late payments. I'm not sure if that is $4,166.67 in session wins, followed by losses 90% of which are countable, or whether that's $4,1666.67 of wins after the losses 90% of which are countable.
A) $4,166.67 (regardless of losses)
B) $4,166,67 (after losses figured in)
C) $4,166.67 (regardless of losses because you haven't met the standard deduction of losses, $16.1K)
******************************************************
Tax Q & A from 2025: https://claimyr.com/government-services/irs/Lost-4000-overall-gambling-but-still-have-to-pay-taxes-on-my-winnings/2025-04-11
Lost $4000 overall gambling but still have to pay taxes on my winnings?
I had what I thought was a pretty rough year with sports betting. Over the last 12 months, I won about $6000 on various games, but ended up losing $10,000 total, putting me at a net loss of $4000 for the year. The problem is, I'm realizing I might still have to pay taxes on the $6000 I won even though I'm in the hole overall.
I don't own any property and have nothing to itemize on my taxes. I've looked into getting creative with deductions while staying legal, but can't find enough to justify itemizing instead of taking the standard deduction. So it looks like I'm stuck paying taxes on the full $6000 in winnings when I actually lost $4000 overall.
This seems completely unfair. Anyone dealt with this gambling tax situation before? Any suggestions on how to handle this for the 2025 filing season?
***
Unfortunately, this is exactly how gambling taxes work. The IRS requires you to report all gambling winnings as taxable income on your tax return. Gambling losses can only be deducted if you itemize deductions on Schedule A, and even then, you can only deduct losses up to the amount of your winnings.
Since you don't have enough other deductions to make itemizing worthwhile, you're in that frustrating situation where you have to pay tax on the $6000 even though you had a net loss for the year. It's one of those tax situations that seems particularly unfair, but that's how the code is written.
One thing to check - make sure you received a Form W-2G for any large winnings. If the sports betting platform didn't withhold taxes, you might need to make estimated tax payments to avoid underpayment penalties.
***
So basically there's no way around this? That seems so wrong. What if I just... don't report the winnings? The sports betting apps I use haven't sent me any tax forms.
***
You are legally required to report all gambling winnings even if you don't receive a W-2G. Not reporting income is tax evasion and can lead to penalties, interest, and potentially worse if the IRS discovers the unreported income.
The threshold for receiving a W-2G varies by type of gambling, but gambling platforms often report large payouts to the IRS through other means. The IRS can match this information against your return. Many online platforms are now required to report transactions, so there's an increasing digital trail of gambling activity.
***
I was in almost the exact same situation last year! Lost about $5500 overall but had to report around $8000 in winnings. I was so frustrated until I found taxr.ai ( https://taxr.ai ). They specialize in analyzing gambling records and tax documents to make sure you're claiming everything properly.
Their system found a few substantial non-gambling deductions I had completely missed that made itemizing worthwhile after all. The combination of my gambling losses and these other deductions actually saved me over $1,200 compared to what I would have paid. They also explained exactly how to document everything in case of an audit.
***
They work with all types of gambling income and losses - sports betting, casino games, poker, horse racing, lottery, everything. They actually specialize in situations where you have multiple types of gambling activities and need to sort through different documentation.
They only use legitimate deductions, nothing in gray areas. In my case, they found medical expenses I didn't realize were deductible, some qualified charitable donations I had forgotten about, and helped me properly document some business expenses from my side gig. Everything was completely above board and IRS-compliant. They actually provide an audit protection guarantee because they're so confident in their approach.
***
Just wanted to update after using taxr.ai from the recommendation above. I was initially just curious but decided to give it a try. Honestly, it was eye-opening! The system found enough legitimate deductions that itemizing made sense for me too.
I had about $7200 in gambling winnings (mostly poker) with $9500 in losses, so I was in a similar boat. With the additional deductions they identified, I was able to deduct all my gambling losses up to my winnings plus take advantage of some other deductions I didn't know applied to me. Saved me about $800 in taxes I would have otherwise paid. Definitely worth checking out if you're in this gambling tax situation.
***
I went through this exact same nightmare two years ago! Lost about $3,500 overall but had to pay taxes on $5,200 in winnings. What made it worse was that I got hit with underpayment penalties because I didn't make quarterly estimated payments on the winnings.
Here's what I learned the hard way: if you're going to continue gambling, set aside about 25-30% of any winnings immediately for taxes, even if you're down overall for the year. That way you won't get caught off guard when tax time comes.
Also, start keeping a detailed gambling diary NOW for next year. Date, location/platform, activity type, amount wagered, amount won/lost. The IRS loves documentation, and if you ever get audited, having meticulous records will save you. I use a simple spreadsheet and update it after every session.
The system is definitely unfair, but understanding how it works helps you plan better. Good luck with your filing!
***
I'm dealing with this exact same frustrating situation right now! Won around $5,800 from various online sportsbooks but lost $8,200 total, so I'm down $2,400 for the year. Yet I still have to pay taxes on those winnings because I can't justify itemizing.
What really gets me is that the betting platforms make it so easy to place bets but provide almost no guidance on the tax implications. I wish I had known about this catch-22 before I started - would have definitely changed my approach to bankroll management.
For anyone reading this who's just getting into sports betting: seriously consider the tax angle before you start. Set aside money for taxes on any big wins immediately, and keep detailed records of everything. The current system basically punishes recreational bettors who have losing years, which seems completely backwards to me.
Thanks to everyone sharing their experiences and solutions here. It helps to know I'm not the only one dealing with this mess!
****************************************************************************
Of course if you're in the 10% tax bracket after the $16,100 standard deduction, $1,000 divided by 0.10 (10% tax rate) = $10,000 wins before having an estimated tax penalty.
A) $4,166.67 (regardless of losses)
B) $4,166,67 (after losses figured in)
C) $4,166.67 (regardless of losses because you haven't met the standard deduction of losses, $16.1K)
******************************************************
Tax Q & A from 2025: https://claimyr.com/government-services/irs/Lost-4000-overall-gambling-but-still-have-to-pay-taxes-on-my-winnings/2025-04-11
Lost $4000 overall gambling but still have to pay taxes on my winnings?
I had what I thought was a pretty rough year with sports betting. Over the last 12 months, I won about $6000 on various games, but ended up losing $10,000 total, putting me at a net loss of $4000 for the year. The problem is, I'm realizing I might still have to pay taxes on the $6000 I won even though I'm in the hole overall.
I don't own any property and have nothing to itemize on my taxes. I've looked into getting creative with deductions while staying legal, but can't find enough to justify itemizing instead of taking the standard deduction. So it looks like I'm stuck paying taxes on the full $6000 in winnings when I actually lost $4000 overall.
This seems completely unfair. Anyone dealt with this gambling tax situation before? Any suggestions on how to handle this for the 2025 filing season?
***
Unfortunately, this is exactly how gambling taxes work. The IRS requires you to report all gambling winnings as taxable income on your tax return. Gambling losses can only be deducted if you itemize deductions on Schedule A, and even then, you can only deduct losses up to the amount of your winnings.
Since you don't have enough other deductions to make itemizing worthwhile, you're in that frustrating situation where you have to pay tax on the $6000 even though you had a net loss for the year. It's one of those tax situations that seems particularly unfair, but that's how the code is written.
One thing to check - make sure you received a Form W-2G for any large winnings. If the sports betting platform didn't withhold taxes, you might need to make estimated tax payments to avoid underpayment penalties.
***
So basically there's no way around this? That seems so wrong. What if I just... don't report the winnings? The sports betting apps I use haven't sent me any tax forms.
***
You are legally required to report all gambling winnings even if you don't receive a W-2G. Not reporting income is tax evasion and can lead to penalties, interest, and potentially worse if the IRS discovers the unreported income.
The threshold for receiving a W-2G varies by type of gambling, but gambling platforms often report large payouts to the IRS through other means. The IRS can match this information against your return. Many online platforms are now required to report transactions, so there's an increasing digital trail of gambling activity.
***
I was in almost the exact same situation last year! Lost about $5500 overall but had to report around $8000 in winnings. I was so frustrated until I found taxr.ai ( https://taxr.ai ). They specialize in analyzing gambling records and tax documents to make sure you're claiming everything properly.
Their system found a few substantial non-gambling deductions I had completely missed that made itemizing worthwhile after all. The combination of my gambling losses and these other deductions actually saved me over $1,200 compared to what I would have paid. They also explained exactly how to document everything in case of an audit.
***
They work with all types of gambling income and losses - sports betting, casino games, poker, horse racing, lottery, everything. They actually specialize in situations where you have multiple types of gambling activities and need to sort through different documentation.
They only use legitimate deductions, nothing in gray areas. In my case, they found medical expenses I didn't realize were deductible, some qualified charitable donations I had forgotten about, and helped me properly document some business expenses from my side gig. Everything was completely above board and IRS-compliant. They actually provide an audit protection guarantee because they're so confident in their approach.
***
Just wanted to update after using taxr.ai from the recommendation above. I was initially just curious but decided to give it a try. Honestly, it was eye-opening! The system found enough legitimate deductions that itemizing made sense for me too.
I had about $7200 in gambling winnings (mostly poker) with $9500 in losses, so I was in a similar boat. With the additional deductions they identified, I was able to deduct all my gambling losses up to my winnings plus take advantage of some other deductions I didn't know applied to me. Saved me about $800 in taxes I would have otherwise paid. Definitely worth checking out if you're in this gambling tax situation.
***
I went through this exact same nightmare two years ago! Lost about $3,500 overall but had to pay taxes on $5,200 in winnings. What made it worse was that I got hit with underpayment penalties because I didn't make quarterly estimated payments on the winnings.
Here's what I learned the hard way: if you're going to continue gambling, set aside about 25-30% of any winnings immediately for taxes, even if you're down overall for the year. That way you won't get caught off guard when tax time comes.
Also, start keeping a detailed gambling diary NOW for next year. Date, location/platform, activity type, amount wagered, amount won/lost. The IRS loves documentation, and if you ever get audited, having meticulous records will save you. I use a simple spreadsheet and update it after every session.
The system is definitely unfair, but understanding how it works helps you plan better. Good luck with your filing!
***
I'm dealing with this exact same frustrating situation right now! Won around $5,800 from various online sportsbooks but lost $8,200 total, so I'm down $2,400 for the year. Yet I still have to pay taxes on those winnings because I can't justify itemizing.
What really gets me is that the betting platforms make it so easy to place bets but provide almost no guidance on the tax implications. I wish I had known about this catch-22 before I started - would have definitely changed my approach to bankroll management.
For anyone reading this who's just getting into sports betting: seriously consider the tax angle before you start. Set aside money for taxes on any big wins immediately, and keep detailed records of everything. The current system basically punishes recreational bettors who have losing years, which seems completely backwards to me.
Thanks to everyone sharing their experiences and solutions here. It helps to know I'm not the only one dealing with this mess!
****************************************************************************
Of course if you're in the 10% tax bracket after the $16,100 standard deduction, $1,000 divided by 0.10 (10% tax rate) = $10,000 wins before having an estimated tax penalty.
Last edited by: ChumpChange on Oct 15, 2026
