Professional gambler taxes and deductions

This changed against you for 2026 and it is the most severe change in the code this year. Only 90% of your wagering losses are now deductible. So a gambler who wins $500,000 and loses $500,000, breaking exactly even, deducts $450,000 and pays tax on $50,000 of income that does not exist.

Gambling full time, in good faith, with regularity and for a livelihood is a trade or business, which is what lets you deduct at all. But losses have never been allowed to exceed winnings in a year, and the new rule folds your non-wagering business costs, travel, data, tournament entries, into the same 90% limited bucket. There is no carry-forward of the disallowed 10%. Record-keeping per session is what makes any of this survive scrutiny, and it is the thing recreational players never do.

The deductions with a rule attached

These are the lines where the answer is not simply "keep the receipt"each has a cap, a percentage or a test that decides how much of the spend you actually get:

Home office: Two methods. Simplified is $5 a square foot to a ceiling of 300 feet, $1,500, no records beyond the measurement, and no depreciation recapture when you sell the house. Actual apportions your rent or mortgage interest, utilities, insurance and repairs by floor area, usually gives more, and does bring recapture. Either way: space must be used regularly and exclusively for business. home office must be principal place of business.
Professional development: Courses that sharpen work you already sell are the clearest case there is. Spending on professional development to stay current is deductible; the training that qualified you to start is not. The test is about where you are, not what the course teaches, which is why the identical enrollment fee can be deductible for you and not for the person sitting beside you.
Phone: You get the business-use percentage of the bill, not the bill. Business-use percentage of total cost. A line you also use personally is a split, and the split needs to be defensible rather than round.

The rest of the professional gambler deduction list

Ordinary and necessary business expenses, deductible in full in the year you pay them, provided they are genuinely for the business:

Travel
Market data feeds
Research subscriptions
Software subscriptions
Professional fees

Worth knowing

From 2026 only 90% of wagering losses are deductible, which can leave a break-even gambler owing tax on money they never made.

That is what is specific to this trade. The larger deductions are the universal ones, see the full checklist.

What each deduction is worth to you

On $100,000 of profit with no state income tax, $1,000 deducted saves $305, 30.5%, because it comes off self-employment tax and income tax together:

Net profit	Saved per $1,000 deducted	Effective
$40,000	$231	23.1%
$100,000	$305	30.5%
$200,000	$297	29.7%

The last row is worth less than the one above it, and that is not a mistake: past the Social Security wage base the self-employment part of the saving drops from 15.3% to 2.9%, and the higher income-tax bracket does not quite make up the difference. A deduction is worth most in the middle.

Add a state income tax and every row rises. The 1099 calculator applies that layer.

Where this comes from

The rules on this page that are specific rather than general are cited below. Follow a link to read the provision itself rather than taking our word for it:

Only 90% of wagering losses are deductible for tax years beginning after 2025, and losses still cannot exceed winningsIRC 165(d), as amended by P.L. 119-21 sec. 70114
Full-time gambling pursued for a livelihood is a trade or businessCommissioner v. Groetzinger, 480 U.S. 23 (1987)

What these words mean

Depreciation: Spreading the cost of something long-lasting, a vehicle, a camera, a tractor, across the years you use it, rather than deducting it all at once.
Depreciation recapture: When you sell something you had been depreciating, the tax office takes back part of the benefit by taxing the gain up to the amount you already deducted.

General information about how these deductions work, not tax advice. Whether a particular expense is deductible for you depends on facts this page does not have, check with a tax professional before claiming anything listed here.