Will I receive a fefund of overage from irs?

Question

I completed the schedule A tax form to write off my gambling losses and medical /dental expenses to offset my winnings. The total for the two was over $9000.00. My question was if the irs would send me the difference. They were $2000.00 more than what I needed to cover my $7200.00 in winnings.

Answer 1

Medical/dental expenses are separate from gambling winnings/losses.  All winnings must be declared and losses can only be claimed to the extent that they offset winnings.

Answer 2

You won't get the $2000 that was more than the gambling losses refunded.  But if you are saying that you filed an amended return and it showed less tax due after you showed the additional deductions, then yes you'll get the difference in the tax due refunded to you.

Answer 3

The amount of itemized deductions from your Schedule A gets subtracted from your total income.  Your gambling losses from 2007 can only be subtracted from your gambling winnings, but you cannot have a net "loss" of gambling againest your winnings, meaning if you won $10,000 then lost $12,000 you DO NOT have -$2000 in income, it does not work that way. You can have $10,000 in winnings, then offest with $10,000 in losses for a net gambling income of zero.  The medical expenses are separate from this, and are only deductable if over 7.5% of your income, not less than that.  Your question does not make much sense. You do not get the difference back, it reduces your tax.  If you make $20,000 then have $9,000 off your schedule A (if this is legitimate which it does not sound like it is) then you are taxed on $11,000- so you pay less tax but you do not get any refund unless you overpay on federal withholdings. If you pay no federal tax at all, and gambling is your only income, you do not get a refund since you never paid tax anyway.  Go to www.irs.gov for more details.

Answer 4

If you did not have the gambling winnings, you could have taken a standard deduction of $5,450 (I assume you are single).

With the gambling winnings, your income increases by $7,200, and you deducted losses of the same amount, plus some other deductions, to total $9,000.  So you have increased your income by $7,200 and increased your deductions by $3,550.  This will not entirely wipe out the tax due on the gambling winnings.  However you might get some of your withholding on the gambling winnings returned to you.

You won't get $2,000 returned to you.  Schedule A only reduces what you pay tax on, it doesn't reduce your tax dollar for dollar.