How to report gambling winnings and losses, 2026

Every dollar you win is taxable income, whether or not anyone sent you a form. Losses come off only if you itemize, and only up to your winnings. From tax year 2026 you may deduct just 90 percent of your losses, so breaking even now produces taxable income.1, 2, 3

Take the standard deduction, which most filers do, and the losses do nothing at all. Your gross winnings are taxed in full.

On the 2026 draft of Schedule 1, gambling winnings go on line 8b, “Gambling”.4, 5 Schedule 1 then carries its total, from line 10, to line 8 of the 2026 draft Form 1040.6

Report all of your winnings, including the ones that no Form W-2G covers.3 You cannot subtract your losses from your winnings and report the difference.7 Losses go on a different form, covered next.

Winnings include lotteries and raffles, and winnings from fantasy sports leagues.5, 8 A prize counts at its fair market value, such as a car or a trip.3

You may deduct gambling losses only if you itemize your deductions on Schedule A and kept a record of your winnings and losses.3 On the 2026 draft Schedule A they go on line 17a, “Deductible gambling losses”, which is part of line 17, other itemized deductions.9

From 2026 the deduction is the smaller of two amounts: 90 percent of your losses, or your winnings.1, 2, 10 Losses include the cost of bingo, lottery and raffle tickets that did not win.11

The 90 percent loss deduction works through the limit with examples, including a year you broke even.

Put the amount in box 1 on Schedule 1, line 8b, with your other winnings. Put the federal income tax withheld, in box 4, on Form 1040, line 25c.5, 10 Publication 525 (2025) names line 25c, and the 2026 draft Form 1040 keeps line 25c, “Other forms”.6

Attach Copy B to your return if box 4 shows federal income tax withheld.6, 10

If another person is entitled to part of the winnings, prepare Form 5754 and give it to the payer. The payer uses it to prepare a Form W-2G for each person listed as a winner.10

What a W-2G tells you explains when a payer must send one, and why no form does not mean no tax.

To deduct losses, keep an accurate diary or similar record of your winnings and losses. Be able to show receipts, tickets, statements or other records of both.3, 10

IRS Publication 529, last revised in December 2020, says the diary should show at least these four things.7

• The date and type of each wager or wagering activity.
• The name and address or location of the gambling establishment.
• The names of other people with you at the gambling establishment.
• The amounts you won or lost.

It also names other proof: Forms W-2G and 5754, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of winnings or payment slips from the gambling establishment. Your records should show your winnings separately from your losses.7

For some games it asks for more. For slot machines, a record of the machine number and all winnings by date and time played. For lotteries, a record of ticket purchases, dates, winnings and losses. The publication calls these general guidelines that are not all-inclusive, and it has no entry for an online or sports betting account.7

Regular gambling withholding is a flat 24 percent, and only on certain kinds of winnings more than $5,000. Winnings from bingo, keno and slot machines are generally not subject to it. If you do not give the payer your Social Security number, the payer may have to withhold 24 percent from any kind of gambling winnings, including bingo, keno and slot winnings of at least $2,000.2

Withholding is a credit against your bill, not the bill.12 The 24 percent withheld may be more or less than your actual rate, and the 2026 federal rates go up to 37 percent.13 The loss limit adds a second gap. Because only 90 percent of your losses count, a year you broke even can still leave tax to pay.1, 2

If a win had no withholding, you may need to pay estimated tax.2, 3

In most cases you must pay estimated tax for 2026 if both of these apply.13, 14

• You expect to owe at least $1,000 in tax for 2026, after subtracting your withholding and refundable credits.
• You expect your withholding and refundable credits to be less than the smaller of 90 percent of the tax on your 2026 return, or 100 percent of the tax on your 2025 return.

These are sometimes called safe harbors. If your withholding and refundable credits reach the smaller one, this rule does not require estimated payments. If your 2025 adjusted gross income was more than $150,000, or more than $75,000 if your filing status for 2026 is married filing separately, use 110 percent in place of 100 percent. The 110 percent rule does not apply if at least two-thirds of your gross income for 2025 or 2026 is from farming or fishing.13, 14

You also do not have to pay estimated tax if withholding will keep the amount you owe with your return under $1,000. Nor do you if you had no tax liability for 2025, were a U.S. citizen or resident alien for the whole of 2025, and your 2025 tax year covered 12 months.2, 14

The 2026 payments are due April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027. If a date falls on a Saturday, Sunday or legal holiday, use the next business day. You do not have to make the January 15, 2027 payment if you file your 2026 return by February 1, 2027 and pay the whole balance with it.13

Each payment is normally 25 percent of the required annual payment, and the penalty is figured separately for each payment period.2, 14

Withholding is timed differently. By default it counts as paid in equal parts on each of the four due dates, whenever it was actually taken. You can choose the actual dates instead. So 24 percent withheld from a December win counts as paid one quarter on each of the four due dates for 2026, which can cover the earlier payments.2, 14

If your income comes unevenly through the year, you may be able to lower or remove the payment for one or more periods with the annualized income installment method.13 For 2026 its periods end March 31, May 31, August 31 and December 31.2 If you use it, file Form 2210, including Schedule AI, with your 2026 return, even if you owe no penalty.13

If you also earn wages, you may be able to avoid estimated payments by having your employer take more tax out of your pay. To do this, file a new Form W-4 with your employer.13 Step 4(a) of the 2026 Form W-4 is for other income you expect this year that will not have withholding. Step 4(c) is for extra tax withheld each pay period.15

A payment app or online marketplace must file Form 1099-K only when the payments pass $20,000 and the number of transactions passes 200 in the year. Both tests must be met.16, 17

The threshold is for payments for goods or services. Money from friends and family as a gift, or as repayment of a personal expense, should not be on a 1099-K. An app may still send you one for lower amounts, and your state may have a lower threshold.18, 19

We found no IRS guidance on a 1099-K for deposits to or withdrawals from a sportsbook.