NFL Shines Spotlight On Sports Betting Winning’s Tax
The old adage yet again rings proverbially true, and this time round for the global sports betting industry. There are only two certainties in life: death and taxes. And if you’re one of the millions of bettors expected to go all out on the betting front this coming NFL season, you might want to listen up because taxes neither respect nor exonerate any man (or woman!).
The NFL’s 100th season is right on the verge and will kick off in a brand-new era of sports betting madness, what with sports fans now being able to legally bet on professional as well as amateur single-line events in the United States. The good news is that you will in all likelihood win at least some money during the new season. The fantastic news is that you may even win quite a bit of unexpected cash. But the flip side of the coin is that you’ll be expected to share the money-pie with the IRS – irrespective of whether you followed legal or slightly more colorful avenues of engagement.
All Gambling Wins Are Taxable
Income generated by gambling is taxable. And that’s the end of the story, says CPA and Director of Taxes at the American Institute of CPAs Cari Weston. This isn’t tied to the amount won or the location from whence it was generated. Taxes will be paid and that appears to be that in Uncle Sam’s little black book.
The number of US states now offering sports betting in a legal and regulated manner number 13. And according to the American Gaming Association, 5 more are expected to hop on board very soon. These include the District of Columbia.
Roughly 7 million people have already indicated their intentions of placing wagers on NFL season outcomes at regulated casino sportsbooks. Millions more plan on raking in the cash in pools with friends and family and co-workers.
Pay Up And Steer Clear
“Withheld” is the key word here. The payor will be required to withhold 24% to be handed over to federal tax authorities. This may mean that you’ll end up receiving quite a bit less than bargained on initially and is something that must be factored into the risk of the bet.
Writing off your gambling losses may be employed in order to not have to part with quite as much money in taxes. This may be a good option for those restricted by a tight bankroll. Losing is winning in this instance, it seems. Not that taxes in general don’t generate strong feelings of loss and mourning.
According to Weston, losses may be deducted to the extent of what the overall winnings are worth. It won’t be in anyone’s best interests top go about creatively with the fiscal books as Uncle Sam plans on conducting random audits on the big men and the small. Back-up documentation should at this point come to mind.
Go Slow On The Splurge
Anyone failing to duly report casino, sports betting and even fantasy sports income will be duly contacted by the authorities. Not the kind of call to be looking forward to really as this will ensure that the tax magnifying glass casts its unforgiving glare on the rest of one’s books to boot. Again, not the ideal situation by any standard.
Weston advises speaking to the professionals in the event of uncertainty or even in the event of a sizeable win. Don’t just radiantly beam and go out splurging, seems to be the silver tread of advice on offer.