Nobody loves paying taxes, but doing the paperwork to submit your taxes can also be quite a nuisance. Luckily, there are tax preparation professionals who can do this paperwork for you. They'll make sure you are getting all of the credits and deductions you are eligible for so you don't pay more than the government requires.
But even if you hire someone else to do your taxes, it is important to know the basics. You need to know what deductions are, when taxes are due, and so forth. Learn about these and other tax topics as you dig into our blog posts.
Winnings from sports betting are considered income, and a portion of the monetary gains are owed in the form of a federal tax payment. If you recently began wagering on team sports competitions and have won a considerable sum a couple times, consult with a sports betting tax consultant to determine how to go about filing your taxes and to receive an estimate of what you owe so far.
The Legalities Surrounding Sports Bets
Sports bets used to be illegal in all of the states, but in the last couple years, some states have made sports bets legal and regulate them in the same manner as gambling that is conducted at a casino. Some states today, however, still deem sports bets to be illegal. Even though betting on sports is supposedly unallowable, people still do it. In fact, many people enjoy making wagers with their friends or co-workers and tend to place the bets from the confines of someone's home.
The law mandates that taxes must be paid on earnings that meet a minimum threshold, whether they were earned legally or illegally. Meet with a tax consultant to go over the circumstances surrounding your winnings. Being aware of how much money you will be liable for paying will help you calculate how much money to save toward the tax bill and the monetary amount that you could potentially owe on top of this, if you win some more sports bets.
Additional Tracking Methods
If you are concerned about being penalized because you placed a sports bet in a state where it is not legal to do so, your tax consultant will advise you on ways to protect yourself. A small informal bet won't garner you any trouble, but massive recurring bets that are placed illegally and that result in you winning a lot of money could draw attention. Place future bets within a region where they are legal and visit a public venue where this type of gambling is allowed.
Keep track of each bet that you place and the amount of money spent on the wager and the result of the bet. If you receive printed receipts that prove your winnings, these should be turned in to your tax preparer when you are ready to file your income taxes for the year. You may even be eligible for a deduction if you lost money on bets but wound up winning more money as a whole throughout the year. Your tax consultant will go over your records and find the best way to go about filing your taxes.