Tax deductions

Some gambling losses can be claimed on state tax deductions with the new law

Michigan will allow players to claim a state income tax deduction for gambling losses – starting in 2021 – due to new state law just signed by the governor Gretchen Whitmer.

“That’s a good thing – you have to claim if you win big, why not claim the losses too,” said Amy Shuman.

“It’s good to help some people – but if you don’t win or lose a lot, it doesn’t help at all,” Leroy Overton said.

“Not only are we winning, we are losing, so that’s a big help – because a lot of seniors are afraid to claim their money back because they think they will have to pay taxes later,” said Shirley Wallace.

This is something that players who have tracked their wins and losses, have only been able to do under federal law – until now.

Michigan is expected to lose between $ 12 million and $ 17 million in revenue. So what’s the incentive?

FOX 2 spoke with Mike Foguth – President and Founder of Foguth Financial.

“I think it’s going to attract more casinos – more online betting,” he said. “Michigan is considered to be an online gambling hub right now, and I think you’ll see more of it.

“It’s kind of like when you saw the movie incentive, why would you do that? Why would you do the corporate tax breaks – because it’s going to attract more businesses. only logic behind it. “

Since the pandemic began and Michigan legalized sports betting and launched sports books and online casinos, thousands more people have entered the gambling market.

Before the law was enacted, all you had to do was claim your winnings.

“The law says if you make more than $ 300, you have to report it as income – regular income just like your W-2,” Foguth said. “I don’t think a lot of people are doing it already. Is it? So this is one of those scenarios out there, where it’s going to impact the bigger ones, who will have losses that ‘they can postpone – especially with online play. “

“Make sure you play your card so they can face your losses as well,” Wallace said. “Hope it balances out.”

Online betting keeps track of deposits, everything you spend and cash out. If you plan on reversing your losses at a casino in 2021 and beyond, be sure to keep track even if it’s the old-fashioned way.

And to be clear, if you bet $ 3,000 and lose $ 3,000, you cannot deduct that amount. In fact, you must have earnings to deduct losses, and then you can only deduct what you have earned.