A Pro Guide to Sports Betting Taxes

There are many online casinos and sportsbooks players can enjoy in the US. Many of them offer excellent deals and sign-up incentives, like the iGamingNJ's bonus code for Unibet. But have you ever wondered about the taxes associated with placing an online sports bet and how the IRS treats winnings? In this article, we are going to talk about the taxes a player may have to pay on their sports betting wins. Any earnings from sports betting must be taxed, and the IRS expects you to report your income.

W-2G for Gaming Income

Like the majority of your other income over the year, gaming money from online casinos and betting sites are taxed. Whether or not you receive the W-2G form to fill out, you must still declare the money you received on your personal income tax return document. If your winnings are less than $1,200, for instance, you won't get a W-2G for the money you’ve won from playing slots. Until your winnings on a single jackpot reach $1,200, the casino is not obligated to provide you with this document.

The W-2G form is also not issued for keno winners until they total $1,500 per play. For a tournament win in poker, this number stands at $5,000. In other words, there are different requirements for each game about when the casino must provide a W-2G. Regardless of whether you got a W-2G, all winnings must be reported on your personal income tax return.

Knowing what to report on your tax return is simple if you obtain a W-2G for your gambling revenue. But what happens if you don't get a W-2G? It is then your responsibility to be aware of that gross revenue figure and submit the appropriate win sum. Players should keep a record of their winnings in order to be sure of their income and how much to pay in taxes.

Should you disclose additional expenses, such as the price of raffle tickets? Schedule A (itemized deductions) line 16, "Other itemized deductions," of Form 1040 is where you should list these figures. The IRS mandates that you keep a precise gaming diary or other records of your losses in order to be able to lawfully deduct your gambling losses.

In any case, you are not allowed to lose more money playing games than you win in any given year. In other words, even if your real losses are larger than that, you are only allowed to deduct $1,000 on your tax return for the year if your gross gains were $1,000 or more.

All iGaming Income is Taxable

Even with the previously provided explanation, it is still important to emphasize this issue. You still have to pay taxes on gambling even if you do it at an online site that is hosted in another country. Despite the fact that online gambling is unregulated in most states of the US, taxes are still owed on what the government views as illicit money. Your earnings are still subject to taxes even if you didn't get a W-2G form.

The idea that gains aren't taxed if you haven't withdrawn from an online sportsbook is a particular tax misconception that is completely false. Whether or not the winnings have been withdrawn by a player is irrelevant.