Betting on the NCAA Tournament? Gambling winnings are taxable!

Do you have March Madness?  I know we do around our household and I love every minute of it!

Many people are glued to the television this month, not only because you get to see huge upsets like Lehigh over Duke on Friday night, but also because people have major wagers on the games. 

Are you betting on hoops?March Madness gambling is only second to the Super Bowl and you know that with all of that money flying around, the Internal Revenue Service is right around the corner with their eyes on everyone and their money.

The difficulty for the IRS is that it is so difficult to track the gambling winnings due to the fact that wagers can be placed behind closed doors and those losing aren’t necessarily reporting their losses.

If you happen to strike it big, whether it is at a casino, in Vegas, or you win the lottery, you can expect to pay about 25% to Uncle Sam.

Also, if you end up on the winning side; make sure you keep proof of your losses as well.  The IRS allows you to subtract any gambling losses from the winnings if you itemize.  Also, just a reminder, you can’t subtract more than you won.

If you do report your winnings and plan on subtracting your losses, make sure that you keep good records throughout the year.  We say it time and time again, but good records are the key to being able to prove to the IRS that you are shooting a Hail Mary.

Keep good records, don’t gamble with money you can’t afford to lose, and you maybe this year’s Cinderella!

If you find yourself dancing in the Final Four, feel free to give us a call or stop by one of our locations to get you prepped for the finals!

David Rocci 

 

Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

 

Posted To: Tax Rants by David Rocci By: David Rocci On: Friday, March 16, 2012
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