Can you deduct gambling losses if you take the standard deduction?

The short answer

You cannot deduct gambling losses and take the standard deduction in the same year. IRS Topic 419 says: “You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses.” ^[4] The winnings are still reported in full on Schedule 1 (Form 1040), line 8b, and the losses go on Schedule A, line 16, “only to the extent of gambling winnings reported on Schedule 1 (Form 1040), line 8b.” ^[5]

For tax years beginning after December 31, 2025, section 165(d) adds a second limit: the deduction “shall be equal to 90 percent of the amount of such losses during such taxable year, and … shall be allowed only to the extent of the gains from such transactions during such taxable year.” ^[3] So the question for a 2026 return is whether 90% of your losses, plus your other itemized deductions, adds up to more than your standard deduction. For 2026 that is $16,100 single or married filing separately, $32,200 married filing jointly and $24,150 head of household. ^{[1] [2]} The IRS puts the choice simply: “In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.” ^[6]

When itemizing beats the standard deduction

Write SD for your standard deduction, D for your other itemized deductions (state and local tax within the cap, mortgage interest, charitable gifts, medical costs above the floor) and L for your gambling losses. Itemizing wins when:

L > (SD - D) / 0.9, and your winnings are at least 0.9 × L.

The first half is the 90% rule; the second is the ceiling at winnings, because a deduction capped at your winnings can never be larger than them. ^[3] With no other itemized deductions (D = 0), the break points for 2026 are:

Standard deductions from IR-2025-103 and Rev. Proc. 2025-32, section 3.14. ^{[1] [2]} The break points are those amounts divided by 0.9; they are our arithmetic, not IRS figures. Filers 65 or older or blind add $1,650 each to the standard deduction for 2026, or $2,050 if unmarried and not a surviving spouse, which raises the break point by that amount divided by 0.9. ^[2]

Four worked examples for 2026

A. Single, won $8,000, lost $8,000. 90% of $8,000 is $7,200. $7,200 is less than the $16,100 standard deduction, so this player takes the standard deduction, deducts $0 of losses, and all $8,000 of winnings is taxed. The year was a wash; the return is not.

B. Single, won $20,000, lost $20,000. 90% of $20,000 is $18,000, which is $1,900 more than the $16,100 standard deduction, so this player itemizes. Winnings less the deduction leaves $2,000 of the winnings taxable in effect (the 10% of losses that no longer counts). But the $18,000 replaces a $16,100 standard deduction the player had anyway, so compared with a year of no gambling, taxable income is $18,100 higher: $20,000 of winnings less $1,900 of extra deduction.

C. Single, $8,000 of state and local tax. The break point is ($16,100 - $8,000) / 0.9 = $8,100 / 0.9 = $9,000. Losses above $9,000, backed by at least as much in winnings, make itemizing worthwhile. At $12,000 won and $12,000 lost, the itemized total is $10,800 + $8,000 = $18,800, which is $2,700 more than the standard deduction.

D. Married filing jointly, $9,000 of state and local tax and $6,000 of mortgage interest. D is $15,000, so the break point is ($32,200 - $15,000) / 0.9 = $17,200 / 0.9 = $19,111.11, about $19,111. At $25,000 won and $25,000 lost, the itemized total is $22,500 + $15,000 = $37,500, which is $5,300 more than the $32,200 standard deduction. At $15,000 won and $15,000 lost, it is $13,500 + $15,000 = $28,500, short of $32,200, and the couple takes the standard deduction and is taxed on all $15,000.

The SALT cap for 2026, and why it matters in example D

State and local taxes are usually the largest other itemized deduction, and they are capped. Section 164(b)(7) sets the cap at $40,000 for taxable years beginning in 2025 and $40,400 for 2026, half that for married filing separately. The cap is reduced by 30% of modified adjusted gross income above a threshold amount ($500,000 for 2025), but never below $10,000. ^[7] In example D the couple's $9,000 of state and local tax is well under the cap, so every dollar counts toward D and the break point falls from about $35,778 to about $19,111. A couple paying $50,000 of state and local tax could count at most $40,400 for 2026, and less at high incomes; only the capped amount goes into D.

Gambling losses never reduce your AGI

Winnings enter adjusted gross income in full through Schedule 1, line 8b. ^[5] The standard deduction or itemized deductions come after AGI is figured (line 12e on the 2025 Form 1040), so gambling losses, when they count at all, reduce taxable income and never AGI. ^[8] Anything keyed to AGI is figured on the full winnings, which is why a break-even year can still change it; the retirees guide works through Social Security and Medicare premiums.

2025 vs 2026: 100% vs 90%

2025 standard deductions from the 2025 Form 1040 instructions and Rev. Proc. 2025-32, section 3.01, which records the amounts as raised by Public Law 119-21. ^{[8] [2]} 2026 amounts from IR-2025-103. ^[1] The 90% rule applies to taxable years beginning after December 31, 2025. ^[3]

For a 2025 return every dollar of losses counts, so the break point is simply the standard deduction itself. From 2026 the same losses buy 10% less deduction, and the break points rise by about 11%.

The 90% rule is law for 2026 as of September 28, 2026. Bills to restore the full deduction are pending in Congress; the repeal tracker follows each one, and the 90% cap page explains the rule itself. If a repeal is enacted for 2026, the break points on this page fall back to the standard deduction amounts.

Professional gamblers: Schedule C

Schedule A is the route for everyone whose gambling is not a business. A professional gambler, whose gambling is a trade or business, reports on Schedule C instead, which is the only way to use gambling losses without itemizing. The 90% limit and the ceiling at winnings in section 165(d) apply there too. ^[3] The test for who qualifies, and what it costs in self-employment tax, is on the professional gambler page.

Records: losses you cannot prove do not count

Topic 419 requires “an accurate diary or similar record of your gambling winnings and losses” and the ability “to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.” ^[4] Before you decide to itemize, make sure the losses in the formula are ones you can document. The session log template is a place to start, and the deducting gambling losses page covers the rest of the loss rules.

Run your own numbers

The calculator takes your winnings, losses and filing status, applies the 90% rule and the standard deduction, and shows whether itemizing helps and how much of your winnings ends up taxed.

Related questions

Sources

1. IRS news release IR-2025-103, tax inflation adjustments for tax year 2026 including amendments from the One Big Beautiful Bill, October 9, 2025
2. IRS Revenue Procedure 2025-32, sections 3.01 (2025 standard deduction) and 3.14 (2026 standard deduction), released October 9, 2025
3. 26 U.S.C. § 165(d), Wagering losses, as amended by Pub. L. 119-21 § 70114 (Legal Information Institute), amendment effective for taxable years beginning after December 31, 2025
4. IRS Tax Topic 419, Gambling income and losses, page last reviewed or updated September 24, 2026
5. IRS Instructions for Schedule A (Form 1040), line 16, Other itemized deductions, tax year 2025 edition
6. IRS, About Schedule A (Form 1040), Itemized Deductions, page last reviewed or updated March 30, 2026
7. 26 U.S.C. § 164(b)(7), limitation on individual deductions for state and local taxes (Legal Information Institute), as amended for taxable years beginning in 2025 and 2026
8. IRS, 2025 Instructions for Form 1040, line 12e and Standard Deduction Chart, tax year 2025 edition

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