Football Season is Here and so are Taxes on Gambling

September 12, 2012 by Ed Becker

With the start of the 2012-2013 football season comes office football pools, trips to Las Vegas, Superbowl grids and Fantasy football.   This is an exciting time for football fans and also a time when the casual gambler needs to understand the tax rules as it pertains to betting.

Gambling winnings are fully taxable on your personal tax return, Form 1040, and should include all winnings you receive in the calendar year.  Examples of winnings are: casinos, sports wagering, horse races and lotteries. Winnings can be cash or prizes (you should pick up the fair market value of these items). In certain instances where the winnings are large, casinos and lotteries will provide you with year end forms, Form W-2G, and they may also withhold taxes on any payouts to you.

All winnings must be reported on your tax return, however, they may be offset with any gambling losses you obtain during the year.  The amount of gambling losses you can deduct can never exceed the winnings you report as income. For example, if you have $100,000 in winnings but $110,000 in losses, your deduction is limited to $100,000. You can not write off the remaining $10,000, or carry it forward to future years.

As with all tax return information, it is important to maintain accurate record keeping to support each line item. If you have losses, you should keep support such as: tickets, receipts, statements and anything else that can support the amount you expended.

If you are an active sports fan and casual gambler, OSYB suggests keeping a diary of your wins and losses.  Enjoy the season and hope your teams have success on the field.  Go Patriots!!