ST. PETERSBURG, Fla. — From the Super Bowl to March Madness, it's more popular than ever to place your bets on sporting events. But any money you win needs to be reported to the IRS.
Sports betting is more popular than ever. Around 50 million people placed bets on this year's Super Bowl. And even though you can't legally bet on sports in Florida yet, you can do it out of state.
All winnings are considered taxable income and should be reported on your federal tax return. Gambling businesses like casinos and the horse track should send you a form with an overview of your winnings, but even that fantasy football league that you won with a group of friends, or the March Madness bracket pool you were involved in legally should be self-reported.
Celine Pastore is a Financial Advisor and says, "Anytime you make income over $600... that is going to trigger some type of a report to the IRS. Whether that's a side job or any type of income, that $600 is kind of the threshold. Below that, it's not going to trigger something, but it's going to be a discussion that you have between yourself and your accountant."
Pastore adds that you should keep in mind that banks and financial institutions are keeping an eye on your accounts. Some are automatically reporting to the IRS any unusual, large deposits.
If you are winning money, you should also be keeping track of any losses you have. That's because Pastore says those losses can be deducted. "You can only deduct losses against winnings. So let's say you had $5000 in losses, but only $3000 in winnings, you can only write off $3000 of the losses to offset the winnings."
Gambling establishments likely will not send you a record of losses, so it's important that you have the documentation.
Pastore says another thing to consider when it comes to large deposits from betting establishments, it can be a red flag to lenders. "Always remember the lenders are going to be going back and look at your bank statements. If there is sports betting activity on there, that can actually be a red flag for a lender and that's not something that people necessarily think about."
So, if you're planning to get a loan for a house soon, you may want to check with the lender to make sure that any gambling winnings wouldn't affect the status of that loan.
Since gambling winnings are considered taxable income, it's important to be aware of certain reporting thresh holds. Pastore points out that different types of gambling have different limits.
"Let's say you're doing like a sports betting type situation. That could be as little as $600. If you got a lottery winning, that could be as much as $5000. There's also $1200 figures that you can set off in Vegas, so there's a number of thresh holds that you do want to make sure you're checking."
If you have any questions about how you should be reporting income like this, it's important to talk with a financial advisor, tax attorney or accountant who can make sure everything is reported properly.