The rule sounds simple — "you can only deduct 90% of your losses" — and that plain-English version is exactly the part that goes wrong. The 90% applies to winnings, not losses, and getting that backwards changes the answer whenever the two numbers differ.
| Step | Common mistake by hand | What this calculator does |
|---|---|---|
| Which figure gets the 90% | Takes 90% of losses, not winnings. | Caps the deduction at the lesser of actual losses or 90% of WINNINGS — the two give different answers whenever losses and winnings differ. |
| The older rule underneath | Forgets losses were already capped at winnings before OBBBA, and applies only the new 90% rule. | Applies both caps and reports whichever one actually binds — usually the new 90% figure once losses reach or exceed winnings. |
| Itemizing requirement | Assumes some deduction is available either way. | Reports zero deduction and full taxable winnings if you are not itemizing — a pre-OBBBA rule this new cap does not change. |
| Professional gamblers | Assumes a trade-or-business structure escapes the cap. | Flags that OBBBA permanently folds a professional's wagering-related business expenses into the same 90%-of-winnings limitation. |
| Is anything I enter uploaded anywhere? | N/A | No. The calculator runs entirely in your browser; nothing is sent to a server. |
Applying the 90% to the wrong figure. The cap is 90% of WINNINGS, not 90% of losses — the deduction is the lesser of your actual losses or 90% of your winnings. Taking 90% of a large loss figure and comparing that to winnings gives the wrong answer whenever losses exceed winnings by more than a little.
Forgetting the pre-existing rule is still there underneath the new one. Losses have always been capped at winnings, full stop — OBBBA adds a SECOND, tighter cap (90% of winnings) on top of that first one. Only the tighter of the two ever actually binds.
Assuming any deduction is available without itemizing. It is not, and this predates OBBBA entirely — a non-itemizer's full winnings are taxable with zero loss offset, cap or no cap.
Assuming a trade-or-business structure escapes the cap. It does not — OBBBA permanently folded a professional gambler's wagering-related business expenses into the same 90%-of-winnings limitation a casual gambler's losses face.
No. Neither this calculator nor a by-hand worksheet built from this page knows your other itemized deductions, your state's own gambling-loss rules, or whether a repeal bill has since become law. Both apply the same published federal rule to the numbers you enter; verify against IRS guidance or a qualified tax professional before relying on either.