Gambling can be an expensive hobby, and few people realize that you can sometimes deduct your gambling losses on your tax return, such as this reader who writes: “My wife and I took a trip to Las Vegas this year, and while we did not go over our budget, we did suffer a bit of a loss at the blackjack table in the casino.
I have been told by a friend that it may be possible to deduct my gambling losses – is this true?”
Yes, it is true that you can deduct losses incurred while gambling from your Federal income taxes. However, there are a couple of very important rules:
1. You can only deduct gambling losses to the extent that you declare gambling earnings; and
2. You must have receipts.