- ORIGINAL NEWS
Americans will bet a record $23.1 billion on Super Bowl 58. The IRS is a ‘silent partner’ in any money you win, expert says
- SUMMARY
As millions of Americans prepare to wager billions of dollars on the Super Bowl, it’s crucial to remember that any winnings are subject to taxation by the federal government.
This year’s game between the San Francisco 49ers and Kansas City Chiefs is expected to attract a record 67.8 million bettors, placing an estimated $23.1 billion in bets.
If you place a bet and win, the difference between your wager and winnings must be reported on your tax return, regardless of the amount.
In some cases, you may receive a Form W-2G to report winnings exceeding $600.
Larger bets, typically over $5,000, may be subject to mandatory tax withholding.
While you can deduct gambling losses, the catch is that you can’t deduct more than your winnings.
This means you can only net your gains and losses, but you cannot claim losses that exceed your winnings.
To deduct gambling losses, casual bettors need to itemize deductions on their tax return.
It’s important to note that state tax rules vary, with some states following federal guidelines and others having their own rules.
Professional gamblers, whose wagering activities rise to the level of a trade or business, face different tax implications.
They can file a Schedule C to report gains as business income and deduct certain expenses, such as travel and hotel costs associated with their gambling.
Currently, 38 states and Washington, D.C., have legal sports betting markets, but California and Missouri, the home states of the Super Bowl teams, are among the remaining states where such gambling is not yet approved.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“A record 67.8 million Americans are expected to place an estimated $23.1 billion in bets on Sunday’s Super Bowl.”
“Sportsbooks, for example, are offering wagers on bets such as how many times the pop star, who is dating Chiefs tight end Travis Kelce, will be shown on camera during the game telecast or whether she will get a mention in the MVP speech.”
Negative
“But if you wager money, keep in mind that the U.S. government expects to participate in your gains, said Mitchell Drossman, national director of wealth planning strategies at Bank of America.”
“Regardless of how you bet, the federal government will expect to see a cut of any proceeds, Drossman said.”