Ohio Income Tax Gambling Losses

Federal schedule a deduction amounts are calculated after fagi is computed.

Ohio income tax gambling losses. You also can t carry that losses amount forward. Know how to report. Gambling winnings are fully taxable by the irs the state of ohio and four cities throughout the state. These winnings are taxed as ordinary income at the same rates as other income is taxed to the taxpayer by the respective agency.

In the state of ohio you can no longer deduct gambling losses and must may tax on all gambling winnings. Thus most taxpayers cannot deduct their gambling losses in computing ohio s income tax. In this instance you won t owe tax on your winnings because your total loss is greater than your total win by 2 000. You cannot claim a greater amount in losses on your income tax than you do record as winnings.

Even if winnings don t require a w 2g the irs still expects the winner to claim the income under other income on his or her tax filings. If i have 80 000 in gambling winnings and 75 000 in gambling losses as might be a typical year for me just part time playing i m profiting 5 000 but now owe a roughly 6 tax on 80 000 which is 4 800 reducing my gambling profit to 200. Gambling losses became deductible under ohio tax law beginning january 1 2013 as part of legislation expanding commercial gambling in ohio. Losses can be deducted if deductions are itemized.

The gaming establishement is required to issue a form called a w 2g to report. Gambling losses are no longer deductible as an itemized deduction for purposes of the ohio income tax effective immediately. For instance if you win 3 000 but lose 5 000 your deduction limit is 3 000 and you can t carry forward the extra 2 000 in future years. It is a good news bad news situation.

A tax preparer will tell for free. In the case of state taxes all casinos must withhold 4 percent of your winnings. Ohio starts with federal adjusted gross income fagi. The good news is that as of january 1 2013 ohio residents got a new state tax break they could not enjoy in the past that is they can now deduct gambling losses from gambling wins just like they can do on their federal return.

For federal purposes individuals deduct gambling losses on the federal schedule a unless they are a professional gambler. Gambling losses are indeed tax deductible but only to the extent of your winnings and requires you to report all the money you win as taxable income on your return. The deduction is only available if you itemize your deductions. If you claim the standard deduction then you can t reduce your tax by your gambling losses.