Online sports betting and taxes question

[Doubledown]

Online sportsbooks are opening up here and I had a question. At what point do you pay taxes on your wager? Single wager and for the year. Thanks.

 

[BobbyFK]

I would talk with your CPA

 

[carolinakid]

i 2nd that cpa is the way to go

 

[Doubledown]

i 2nd that cpa is the way to go

I will but roughly how does it work

 

[carolinakid]

it better to just talk with a cpa and explain what you are doing and he will advise you the best way to go with the gains and losses

 

[venditto]

Don't take legal advice from forum stiffs especially me

 

[Doubledown]

Don't take legal advice from forum stiffs especially me

I'm not asking for advice. Just what the protocol is.

 

[venditto]

You'll rarely get good advice for free

 

[sportsbettor5]

Online sportsbooks are opening up here and I had a question. At what point do you pay taxes on your wager? Single wager and for the year. Thanks.

If you're a US citizen and the winnings accrue to you as an S/MFS/MFJ/HOH/QW taxpayer, there are only two possibilities that I know of:

The first possibility is that you qualify as a professional gambler. Tax courts have come up with loose criteria to qualify or disqualify you from this status and some of them are listed here. As a professional gambler, you owe taxes on net winnings, must file 1040 Schedule C for your gambling business, and must itemize all gambling wins and losses there.

The second possibility is that you are a recreational gambler. You then declare gambling income directly on Form 1040, Schedule 1, box 8d. Losses are only deductible if you itemize deductions by filing 1040 Schedule A, (you would lose the ability to take the standard deduction, if that was an option for you).


The above concerns only federal income tax. Different states handle gambling differently for purposes of state income tax.

 

[rolandcorts]

Some states tax you on your winnings but won't let you deduct losses (win $100 then lose $100 and they will want $30 from the win). This is disgusting and if you're in one of these states, just play offshore. Illinois is one I think.

 

[Tanko]

Great replies sportsbettor5 and Rolandcorts.

 

[dunklenacht]

I'm not a tax expert, but it might be a good idea to consult one for personalized advice based on your specific situation. They can guide you on how to handle your winnings and deductions properly. After all, we want to enjoy the thrill of betting without any worries about taxes.

 

[BobbyFK]

I'm not a tax expert, but it might be a good idea to consult one for personalized advice based on your specific situation. They can guide you on how to handle your winnings and deductions properly. After all, we want to enjoy the thrill of betting without any worries about taxes.

Thank you and welcome to BMR! How did you find us? What sports do you like to wager on?

 

[quantumleap]

Some states tax you on your winnings but won't let you deduct losses (win $100 then lose $100 and they will want $30 from the win). This is disgusting and if you're in one of these states, just play offshore. Illinois is one I think.

I don't know about individual bets, but I believe if you are down for the year the IRS won't allow you to deduct this from your other income. They will tax any gain from gambling throughout the year. Totally unfair.

 

[jjgold]

If you don’t get a W- form don’t worry about it

 

[vorravut]

Taxes on wagers can be a bit tricky. From my experience, you typically pay taxes on your winnings, especially if they exceed a certain threshold. It's usually reported annually, but it's smart to keep track of your wins and losses throughout the year.

 

[JDS]

You'll rarely get good advice for free

I never got any good tax advice from you, and now you’re hiding from the IRS lol.

 

[flyingillini]

I never got any good tax advice from you, and now you’re hiding from the IRS lol.

Is Patty back posting?

 

[JDS]

Is Patty back posting?

No he’s off the grid, he’s in hiding I said. That was an old post Flyer.

 

[BigJay]

No he’s off the grid, he’s in hiding