What does your winning bet mean for your taxes
key takeaways
- Sports betting winnings are taxable income, even if you don’t receive a tax form.
- Some winnings may trigger Form W-2G, but you must still report all gambling income.
- Gambling winnings are taxed as ordinary income, which is added to your other earnings for the year.
My favorite football team didn’t even make the playoffs, so when I placed a longshot parlay during the Big Game, it was mostly to make things interesting.
Things got interesting fast: I won, and it was more than I had ever bet on a single bet before.
After the excitement wore off, a question occurred to me: Do I need to report that money on my taxes?
If the same question has ever come to your mind after winning a bet, then know here what it is.
Your winnings are considered income
The IRS considers gambling winnings as taxable income. Whether you win through a sports betting app, at a casino, on scratch-off tickets, or anywhere else, that money generally must be reported on your tax return. Whether it’s $5 or $5,000, the winnings count as taxable income.
Depending on the size and type of your winnings, you may receive Form W-2G. For some gambling winnings, this form is issued when the payment meets IRS reporting thresholds. In some cases, large winnings may even be withheld from federal taxes.
Even if you don’t receive a W-2G form, You are still responsible for reporting all gambling income.
How your gambling winnings are taxed
Gambling winnings are generally taxed as ordinary income. This means they are added to your other income for the year, such as salary, self-employment income, or investment income.
If you itemize your deductions, you may be able to deduct gambling losses up to the amount of your winnings. But you can’t deduct more losses than your winnings, and you’ll need records to support your claim.
Report your winnings with confidence when you file
It may seem complicated at first, but the basics are simple: report your wins, keep good records, and understand when losses can be deducted.
equipment such as TurboTax can help guide you Step-by-step reporting of gambling income and losses When you file.
Betting regularly? Here’s how to properly report gambling wins and losses.