A losing season can still come with a tax bill.
A bettor collects $2,000 in winnings on NFL moneyline bets, then loses $3,000 on parlays and point spreads. The bankroll is down $1,000, but the winning bets still count as taxable gambling income.
Sports betting losses may be deductible, but they are not a straightforward write-off against wages. Claiming them generally requires itemizing deductions, and limits apply. A sportsbook’s year-end net figure does not, by itself, settle what must be reported. Keeping records of both winning and losing wagers matters—even when the season ends in the red.
How much can bettors deduct?
For a 2025 federal tax return filed in 2026, a recreational bettor can deduct documented gambling losses only by itemizing deductions. The deduction cannot exceed gambling winnings for the year. A bettor with $1,000 in winnings and $1,400 in losses can deduct at most $1,000—not the extra $400 against wages or other income.
A different limit applies to tax years beginning in 2026: only 90% of gambling losses is eligible for deduction, still subject to the cap of gambling winnings. If a bettor wins $1,000 and loses $1,000 during 2026, the maximum loss deduction is $900. That can leave $100 in taxable gambling income despite a break-even betting record.
Filing a return in 2026 does not put a 2025 betting record under the new 90% rule. For the broader picture, including how winnings are reported, see the sports betting tax rules.
Save sportsbook transaction histories and a record of wagers, dates, winnings and losses. A year-end account balance alone does not establish the losses claimed.
Count wagers, not deposits
Tax records start with each settled wager, not the money moving in and out of a sportsbook account. A deposit funds bets; a withdrawal moves money back to a bank. Neither shows which wagers won or lost.
Suppose a bettor puts $50 on a moneyline at +100 and wins. The sportsbook returns $100: the original $50 stake plus $50 in winnings. The full $100 payout is not profit. If that same $50 wager loses instead, the $50 stake is a gambling loss. This distinction is part of the fundamentals of sports betting, but it matters just as much when preparing tax records.
A year-end net-profit figure can hide both sides of the calculation. For example, $500 in winning-wager profits and $400 in losing stakes produce a $100 net gain—not just $100 in winnings. Bettors who may claim a loss deduction need records showing the wins and losses separately, rather than relying on an account balance or withdrawal total.
Keep a wager log with the date, sportsbook, stake, odds, result and amount won or lost. Match it against sportsbook transaction histories and bank records, and save those histories before an account stops making older bets easy to find.
What the 2026 limit looks like
For an itemizing bettor with $10,000 in winnings and $10,000 in documented losses, the tax year matters. Beginning in 2026, the federal deduction is limited to 90% of gambling losses, even when those losses equal the winnings.
| Tax year | Winnings | Losses | Deductible losses | Winnings left unoffset |
|---|---|---|---|---|
| 2025 | $10,000 | $10,000 | $10,000 | $0 |
| 2026 | $10,000 | $10,000 | $9,000 | $1,000 |
The table shows the effect of the loss deduction, not the bettor’s final tax bill. Winnings are still reported in full as income; eligible losses are claimed separately as an itemized deduction. A bettor who takes the standard deduction cannot separately deduct those losses.
Losing more than the winnings does not create a deduction against other income. Suppose a bettor wins $10,000 and loses $12,000 in 2026. Ninety percent of the losses is $10,800, but the deduction is still capped at the $10,000 in gambling winnings. The remaining $2,000 of actual losses cannot be used to reduce wages or other non-gambling income.
Unused gambling losses also cannot be carried into another tax year. That matters for a bettor who loses money in December and wins on a moneyline or parlay the following January: the prior year’s excess losses cannot offset the new year’s winnings. Keeping settled-wager records organized by tax year makes that boundary easier to track.
Does the standard deduction make betting losses worthless?
Claiming the standard deduction means gambling losses generally provide no federal tax benefit. Sports betting losses go on Schedule A, which a bettor uses only when itemizing deductions. Winnings still have to be reported as gambling income; taking the standard deduction does not turn winnings and losses into one net figure.
The comparison is between the total allowable itemized deductions and the standard deduction for the bettor’s filing status and tax year. That total may include eligible gambling losses alongside deductions such as qualifying mortgage interest, charitable gifts and state and local taxes, each subject to its own rules and limits.
For example, if a bettor’s other allowable itemized deductions plus eligible gambling losses still fall below the standard deduction, itemizing just to claim losing moneyline bets or parlays generally makes no sense. If the combined total exceeds the standard deduction, itemizing may lower taxable income. The betting losses alone are not the deciding figure: what matters is how the full Schedule A total compares with the standard deduction.
How to report winnings and claim losses
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Download settled-bet history
Get transaction records from every sportsbook used during the tax year. Include settled moneyline, point spread, parlay, and prop wagers—not just deposits and withdrawals.
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Report winnings as income
Report gambling winnings on Schedule 1 of the federal return. For more on reporting sportsbook winnings, the key distinction is that winnings are reported separately from losses, even when the bettor finished the year down overall.
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Claim eligible losses on Schedule A
Bettors who itemize can list documented gambling losses as an itemized deduction, subject to the limit for the applicable tax year. Losses do not simply reduce the winnings entered on Schedule 1.
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Reconcile the paperwork
Match sportsbook statements and any Forms W-2G against the wager log. Keep records showing each wager’s date, stake, result, and payout, along with statements or other available supporting documents.
A Form W-2G or sportsbook tax document can help check the figures, but it may cover only certain payouts. Bettors remain responsible for reporting taxable winnings even when a sportsbook sends no form.
Keep a record of every settled bet
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Combine records from every sportsbook
Download transaction histories for the full tax year. Include accounts that closed or saw only a few wagers.
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Log the details of each wager
Record the date, operator, wager type, stake, result and payout. Identify a point spread, moneyline, over/under, parlay or prop clearly enough to match it to the sportsbook record.
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Separate wins, losses and transfers
Mark whether each settled wager won or lost. Keep deposits, withdrawals, refunds and canceled bets out of the loss total; a withdrawal is not a winning wager.
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Save the evidence
Keep bet slips, settlement details and account statements alongside the log. Reconcile the totals across sportsbooks; this guide to tracking betting wins and losses correctly can help organize the entries.
A sportsbook dashboard may show a net loss without showing the wagers behind it. Preserve records that connect each stake to its result and payout, even if the app later changes what transaction history is available.
State taxes and professional bettors
A federal loss deduction does not guarantee a state deduction. States set their own rules for taxing gambling winnings and allowing losses, and they may not adopt federal changes on the same schedule. A bettor can therefore owe state tax on winnings even when documented losses reduce the federal tax bill. The rules for the state where the bettor files should be checked before assuming the federal result carries over.
Professional gamblers face a separate question: whether their betting activity qualifies as a trade or business. Placing hundreds of point-spread, moneyline or prop bets does not establish professional status by itself. The pattern of activity, businesslike records and intent to earn a livelihood from wagering matter more than bet count alone.
That distinction can change how gambling activity is reported and which expenses may be considered. It does not make wagering losses unlimited. Bettors with substantial activity, wagers across multiple states or incomplete sportsbook records should consult a qualified tax professional rather than assume that high volume changes their filing status.
- Confirm the tax year: 2025 rules allow itemized gambling losses up to winnings; for tax years beginning in 2026, only 90% of losses are eligible, still capped by winnings.
- Reconcile settled wagers across every sportsbook, separating winning payouts and losing stakes from deposits, withdrawals, and open bets.
- Compare all allowable itemized deductions with the standard deduction, then check the rules for each state where a return is required.
A losing year does not automatically produce a tax write-off. Nor is the balance shown in a sportsbook account a return-ready figure: it can reflect transfers and unsettled bets as well as completed wagers. Filing starts with wager records, not the number on the app’s home screen.
If records are incomplete or activity spans several sportsbooks, a tax professional can help reconcile the figures before a return is filed.
