- All gambling wins are considered taxable income.
- The Super Bowl is the most wagered on sporting event every year.
- Sports bettors can use gambling losses to offset taxes on Super Bowl wins.
TAMPA BAY, Fla. – With the Super Bowl only a few weeks away, it is a good time to look at how federal taxes and Super Bowl betting are connected.
The IRS is just as eager as sports bettors for the Super Bowl as all gambling revenue is considered taxable income. Sports bettors are meant to keep a log of all their wins and losses for filing their taxes.
Sports bettors who avoid paying their taxes on their Super Bowl wins run the risk of owing penalties and back taxes should they ever be audited. The safe decision is to pay your taxes on Super Bowl betting wins.
Taxes, Taxes, Taxes
The Super Bowl will be filled with betting opportunities for sports bettors whether it be from prop bets, straight game wagers, or live in-game betting. All these forms of betting could lead to major wins come Super Bowl Sunday.
The IRS requires sports bettors to claim all gambling revenue should the wins be more than $600. This $600 is accumulative, meaning that all gambling revenue is included.
For example, should sports bettors win, let’s say $200 betting on the Super Bowl, and then throughout the year win betting on other games and sports and their total wins exceed $600, even though they only won $200 from the Super Bowl it still needs to be reported.
“Most people don’t realize they have to report any kind of winnings from gambling activities,” said Oscar Vives Ortiz, a CPA who serves on the American Institute of CPAs’ personal financial specialist committee. “Whether you win $10 or … a large amount, everything should be reported to the IRS.”
What happens is that Super Bowl betting sites should provide sports bettors with 1099-MISC forms around tax time. These forms will be required to be filled out by sports bettors when filing their taxes. It is also important to keep a receipt for all your wins and losses for tax purposes.
The IRS is allotted 24% of all gambling winnings for federal taxes. Sports bettors can file and pay these taxes early or can wait until tax time to file but skipping out of filing and reporting the income can lead to bettors having to pay even more down the line.
“The risk of not reporting it is that if you get audited, and they find it, you’d owe back taxes and penalties,” said Vives Ortiz. “If you skip it on your return, the IRS has a copy and you’ll immediately be flagged in their system.”
Gambling losses are also important to file, as they can offset some of the owed taxes sports bettors have on their wins.
“You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses,” said the IRS. “The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as Other Itemized Deductions."
If sports bettors win $1,000 betting on the Super Bowl but lose $400 in other wagers, then when filing taxes, sports bettors will only be responsible for the $600 they won. If a sports bettor loses more than they won betting on sports, they only need to claim the losses up to the same amount they lost.
Understanding how taxes work with betting is a great way to avoid betting future legal trouble with Uncle Sam. One bet that is not recommended is betting the IRS won't find out about your gambling wins.
Growing up a major football and basketball fanatic, Giovanni Shorter has spent his early years obsessed with stats and numbers about his favorite sports teams. Coming from a narrative writing background, Shorter always tries to tie his love of sports information with his desire for storytelling to not only inform, but entertain readers. When he is not keeping fans up to date on the best Super Bowl odds, he is watching his favorite sports, playing videogames, or writing and recording music.