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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2437
Experience:  IRS licensed Enrolled Agent and tax instructor
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I paid gambling - state taxes in oklahoma in 2016 for 2015.

Customer Question

I paid gambling - state taxes in oklahoma in 2016 for 2015. Am I able to claim these taxes paid on gambling winnings for the year 2016? I live in Texas and had losses but I had to pay state taxes in Oklahoma for these winnings.
JA: The accountant will know how to help. Is there anything else important you think the accountant should know?
Customer: I don't think so.
Submitted: 2 months ago.
Category: Tax
Expert:  emc011075 replied 2 months ago.

Hi. My name is ***** ***** I will be happy to help you.

You can deduct any state taxes if you itemize your deduction on your federal return. You can choose between deducting general sales tax or income tax. But if you live in TX where's no income tax you may choose to deduct sales tax instead if it is higher than the income tax from OK.

https://www.irs.gov/instructions/i1040sca/ar01.html#d0e329

Customer: replied 2 months ago.
My losses were greater than winnings so I itemized my winnings on the Federal Income Tax. However, Oklahoma taxes were based on my Federal Income Tax adjusted income...they got a percentage based on my winnings even though I had losses. I think this is because of state taxes...
Customer: replied 2 months ago.
I filled out a 5llNR - Can the $3,000 I paid to Oklahoma be deducted for 2016.
Expert:  emc011075 replied 2 months ago.

OK. Deduction of losses and deduction of income tax are two separate deduction. Most state do not allow direct deduction of gambling losses but if you claim as nonresident in OK, you are allowed to claim federal itemized deduction, which means you will reduce your OK income by the losses if you itemize your deduction.

If you losses are from 2015 and 2016, you will have to claim what you lost in 2015 on your 2015 return and your 2016 losses on 2016 return.

Expert:  emc011075 replied 2 months ago.

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