Submitted By: someone
Answered: January 20, 2020 9:32 pm

I won some lottery money. What can I deduct?

You cannot simply net your gambling losses against your winnings. You must report all of the lottery money as income. Then, if you itemize personal deductions (using Schedule A) instead of claiming the standard deduction, you can deduct gambling losses as an “other” itemized deduction. Such losses are not limited to what you spent on lottery tickets; they include all gambling losses (e.g., horse racing, bingo) that you can prove, but the total deduction for gambling losses cannot exceed the gambling winnings you report.

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Tax Glossary

Individual retirement account (IRA)

A retirement account to which up to $4,000 (or $5,000 if you are 50 or over) may be contributed for 2007, but deductions for the contribution are restricted if you are covered by a company retirement plan. Earnings accumulate tax free.

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