Professional gambler. Filing Sch C. Do I enter W2G's AND deduct losses when asked? Then also enter the offsetting entry as "other income' on Form 1040, Line 21?

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June 6, 2019
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Hal_Al

Employee

No. If you are filing Schedule C, you do not enter the W-2Gs at the W-2G screen. Enter at Business Income. You will not get the offsetting entry box. The W-2G screen is not for professional gamblers. Losses will be entered as business expenses. There is no category on Schedule C; so enter losses as other expenses.

Wagering losses still cannot exceed gambling winnings. Any excess gambling losses over gambling winnings cannot be carried forward or carried back to offset gambling winnings from other tax years.

Reference:

https://www.taxsamaritan.com/tax-preparation-services/gambler-tax-preparation/

hseing

What will it happen when the IRS discover that the W2G was not reported since it’s reported under Business Income? How does the IRS know that the amount in the Business Income belong to i.e. is the W2G amount? Anything is linked between the expenses amount and W2G so that the IRS won’t question about not reporting the W2G amount? Thanks for your help.

DoninGA

Employee

@hseing Already answered here - https://ttlc.intuit.com/community/taxes/discussion/re-schedule-c-for-gambling-income-where-to-show-loss/01/860861#M336620

oldmandef

What if we are filing Sch C professional gambler but also received a W2G in which taxes were withheld? Do we put those withholdings under "other federal/state withholdings" since we are only filing sch C winnings (income) and losses (expenses)? Or is there a better method?

AliciaP1

Yes, that would be the best way to handle those withholdings and report all income appropriately.

@oldmandef

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oldmandef

Thanks @AliciaP1 . My state form is giving me an error doing it this way, but if I put the W2Gs in the W2 area then put the total losses as expenses on schedule C it works. However doing it this way I won't have any income on schedule C though, do you think that's OK in this case to show the income on the W2G area and losses on schedule C as expenses?