Do you like to gamble? If so, Congress has some bad news for you.
The One Big Beautiful Bill Act limits how much you can deduct for gambling losses starting in 2026. Both casual and professional gamblers may deduct only 90 percent of their losses against their winnings. The remaining 10 percent of losses disappear permanently—you can’t use them in future years.
Congress added this last-minute change to the OBBBA, which could significantly impact gamblers.
What This Means for You
Right now, gamblers may deduct losses only up to the amount of their winnings. Casual gamblers may deduct losses only if they itemize personal deductions. Beginning in 2026, you won’t even deduct all your losses.
This rule could force you to pay tax on “fictional income”—money you never really earned. For example, if you win $10,000 and lose $10,000 in 2026, you’ll report $10,000 in gambling income but deduct only $9,000 in losses. That leaves you with $1,000 in taxable income, even though you broke even.
Current Efforts to Reverse the Law
Gamblers across the country have expressed outrage, and lawmakers have already introduced three bills to eliminate this 10 percent haircut. Whether Congress will act remains uncertain.
What You Should Do Now
Regardless of what happens in Congress, you need accurate records of your gambling activity. Keep detailed records of your wins and losses, especially losses.
Track your gambling by session, not by individual bet. At year’s end, add up all winning sessions separately from all losing sessions.
Don’t rely on casino win/loss statements—they often inflate winnings and underreport losses.
How We Can Help
Sterling Tax and Accounting is here to help your business with tax planning! Our comprehensive approach to tax planning helps reduce your overall tax liability and keep more money in your pocket. If all your accountant does is file your taxes, chances are they are making you pay more than your fair share of taxes.
Learn how to proactively save on taxes by scheduling a call with our tax planning specialists.
Our tax planning, accounting & business services help you stay on track. Sterling Tax & Accounting will work with you to optimize your business and minimize your taxes. We will work to provide you and your business with the tools and resources you need to build a solid tax and business foundation. We’re a trusted CPA Firm in Sarasota, Florida. We serve clients all over the US, and proactively work to minimize their taxes.
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