tax_gamblingDon’t you just love watching college football? If you said yes, you might also enjoy watching the betting lines for college football. It’s amazing how much a betting line can change in a few days or with news – good or bad – from a college football program. And there’s news almost every week of players getting injured or suspended or who knows what.

Just take a look at how many times Florida State quarterback Jameis Winston has moved the betting line in college football. Winston was suspended in Week 4 of the season for an off-field incident and caused the betting line to move from -20 all the way down to -9.5. His status was in question again for the Week 8 game against Notre Dame. This time the uncertainty of Winston’s status caused several sports books to remove the betting line for that game.

College Football Playoff Payoff 

Winston and the Gators will be back on the field on New Year’s Day as part of the College Football Playoff.  They will take on Oregon in one of the semi-final games hosted by the Rose Bowl. The wagering has already begun.

Some bettors prefer college football because of the wider point spreads and greater chances for an upset than in the pros. The Nevada Gaming Commission reported in 2012 that almost $1.5 billion was wagered on football. A CNBC report estimated that up to $70 billion is wagered illegally each year on college football.

Those figures – at least the ones for legal betting – must make the folks at the IRS smile. The IRS tracks gambling winnings over $600, and those winnings are taxable as outlined in Publication 525.

Tax Tips for the Betting Crowd  

If you’re thinking about betting on the College Football Playoff, here are a few tax tips to consider.

  1. Don’t forget to report your college football winnings on your taxes. They are considered income. If you win more than $600, you will receive a Form W-2G in the mail, which you should share with your tax adviser to report as “other income” on your federal tax return.
  2. Keep detailed records of your betting and gambling activities. You will need them in case the IRS has questions.
  3. While keeping track of your winnings, remember to also keep track of your losses. These can be reported on your tax return under “other miscellaneous deductions.” This will help reduce the chance of you owing money to the IRS.
  4. If betting real money is not for you, there are an abundance of free pick ‘em leagues on Yahoo and ESPN that are almost as fun, but a lot less stressful.
  5. And if you have a gambling problem or know someone who does, call the national Gambling Addiction hotline at 1-800-522-4700.       

Share this blog with friends and find more interesting tax tidbits from Liberty Tax Service on Twitter and Facebook.

Disclaimer: Tax Lounge is an informational source for industry news and related topics. We take every effort to provide honest and accurate tax information, but this information should not be a substitute for professional tax advice. Use our office locator to find your local tax office or click here to subscribe to our free newsletter.