Tax on Sports Betting

Tax on Sports Betting

Sports Betting Taxes

If you live in the United States, you’re aware that we have tax laws that apply to virtually everything we do.  No matter how you make income in the United States, it is likely that you must report it to the IRS so that the government can tax you for the revenue you’ve earned.  Unfortunately for us, that also applies to sports wagering and overseas sportsbooks.  They matter on Tax Day and if we’re living straightforward lives, we owe the government on all of our winnings.

Many bettors in the US do not report their offshore winnings to the IRS for fear that their activity may be deemed illegal.  Fear not.  The US government has made no laws around offshore wagering and nothing is expressly prohibited in federal bylaws.  In plain English, that means you must pay taxes to the federal government on revenue you earn from places like Bovada or Betonline.ag.

Top 10 Sportsbook Options for Making Money

Gambling SitesSportsbook ReviewWelcome Bonus
★★★★★BetOnlineBetOnline Review50% on $1000
★★★★★BovadaBovada Review50% on $250
★★★★★5Dimes5Dimes Review50% on 520
★★★★MyBookieMyBookie Review50% on $1000
★★★★IntertopsIntertops Review50% on $250
XBetComing Soon!100% on $300
★★★★TopBetComing Soon!100% on $1000
★★★★GTBetsComing Soon!100% on $500
★★★★

Sportsbetting

Coming Soon!

50% on $1000

★★★★SkybookComing Soon!175% on $1500

Top 10 Sportsbook Options for Making Money

Gambling SitesWelcome Bonus
★★★★★BetOnline50% on $1000
★★★★★Bovada50% on $250
★★★★★5Dimes50% on 520
★★★★★MyBookie50% on $1000
★★★★★Intertops50% on $200
★★★★XBet100% on $300
★★★★TopBet100% on $1000
★★★★GTBets100% on $500
★★★★

Sportsbetting

50% on $1000

★★★★Skybook175% on $1500

Tax on Online Sports Gambling

The laws around taxes and online gambling are not that complicated.  If you’re doing any wagering in the United States or outside of it, and you make money, you must pay taxes on it.

The law doesn’t care if you’re a professional or an amateur.  It doesn’t matter if you just won a $50,000 jackpot or $50.  The government considers all gains financially to be “taxable income.”

Losses are also factored in to the IRS equation, so keep track of your performance in the event you can write some of your expenditure off.  These will be reported on a separate section and separate form of your tax return.

Record Keeping

You may not think that tracking your performance is worth it.  Did you know that you’re only throwing away more money doing so?

Let’s say for example, you won $20,000 on Sunday but went on to lose $12,000 on Monday.  You report a net win of $20,000 as “other income.”  The $12,000 loss goes into your itemized deductions.  Even though an overall net profit was recorded on the Sunday/Monday casino trip, it was recorded on two separate days making it two separate net reports.

Itemizing your deductions is important as it’s the only way that citizens can take advantage of the itemized deduction for gambling losses.  It can make a huge difference on the taxable income available to the government on Tax Day.

Federal vs State Taxes on Online Sports Betting

Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming all are great states to live in.  None of them have state income taxes that need to be paid and therefore you will only be due for your federal return.  In all other states, it is integral that you report your gambling winnings as they are taxed on a state by state basis.

Offshore Accounts

There is a lot of misinformation about offshore accounts and holding funds in them to evade taxes.  Many CPA’s advise that this is a good method to save money, but the IRS has different ideas.  They believe that all money made by US citizens is taxable by the US, even if it isn’t in the possession of the US citizen.

This can be complicated for sports bettors, especially those who participate online.  The IRS wont look fondly upon your evasion with an offshore account.  We’re sure there are lots of parties out there who take advantage of this method.

The point is, be careful.  Offshore account is quite the buzzword when it comes to illegal things.  While the IRS wont likely push for jail time, they will fine this type of activity heavily.  Tax court can start digging into your pockets and making your accounts a living hell by drawing against your wages.  Make sure you know the price of admission before you take the trip down to Switzerland.

Hiring a CPA

We are not tax experts and taxes can be extremely complicated, especially when you factor in an offshore entity.   If you’re a professional or highly skilled amateur who gambles at a higher volume, we highly recommend hiring a CPA.  CPA’s have an incredible ability of maximizing returns to keep your money in your pocket instead of Uncle Sam’s.  They do a lot more than entities like TurboTax, so go make a relationship.

If you are filing on your own, keep in mind that only professional gamblers can mark their income as “Net” for wins and losses.  Amateur gamblers will still need to record their income as “other income” on their taxes and their deductions will still fall on line 21 and under itemized deductions found under Schedule A of your Tax Form.

Didn’t understand that?  Neither did we.  For a good list of CPA’s check out your local phone book.

Leave a Reply

Your email address will not be published. Required fields are marked *