Are there any taxes on winnings from betting?

Frequently Asked Questions: Gambling Income Tax If taxpayers live in New York City, which collects its own income tax, they will owe an additional 3.876% in addition to the state tax. These tax calculations are estimates and rates may change. Unfortunately, if you win a lot playing, you don't keep every penny. Gambling winnings are fully taxable and the Internal Revenue Service (IRS) has ways to ensure that you get your share. And it's not just about casino games.

Winnings from lotteries, horse races, off-track betting, sweepstakes and gaming programs are also subject to tax. The Super Bowl is over and fans are talking about the Chiefs and the commercials, but don't forget the taxes if you bet on the big game. If you were unlucky and didn't make any gambling profits at all during the year, you can't deduct any of your losses. Once you have gathered your records, you must declare your winnings as gambling income on line 8 of Form 1040, Annex 1, which is used to declare types of income that are not listed on the main 1040 tax form.

According to the IRS, winnings from sports betting or any form of gambling, including horse racing and lotteries, should be listed as “other income” on your tax return. Conversely, if you live in Nevada, go on vacation to New York and place a couple of big bets while you're there, you could receive a tax bill. Consider consulting an accountant or tax lawyer about tax-related income and possible deductions. Tax revenues have been the main driver of the massive expansion of sports betting in the United States.

However, the good news is that if you win your bet with a point margin, the amount will be returned to you along with your winnings. If you receive a W-2G form (opens in a new tab) along with your gambling winnings, don't forget that the IRS will also receive a copy of the form. Some jurisdictions allocate most (if not all) of the tax money related to sports betting for a single purpose, such as supporting public education or increasing funding for law enforcement. Dealing with your tax liability after getting lucky with Powerball or other gambling activities with or without cash can be difficult.

The fiscal impact varies depending on multiple factors, but the bottom line is that if you make a decent amount of money betting on sports, be prepared to redirect some of that money to the tax collector. And yet, it's taxed at certain rates (often depending on how much you won betting and your total annual income).

Beulah Figlioli
Beulah Figlioli

Certified gamer. Proud bacon fan. Friendly twitter advocate. Award-winning music maven. Incurable internetaholic.

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