Would you believe one in every four American adults is rolling the dice and placing bets on this Sunday’s Super Bowl? Betting enthusiasts will wager an eye-popping $24 billion on the game, with legal bets accounting for only about $2 billion. This marks a 35 percent increase from last year, signaling another winning hand for this robust economy.
So, what are the tax implications if you win big?
If you place your bets through a legal outlet, you will likely receive Form 1099-G (with the 'G' for gambling). However, if you are betting through your mother-in-law‘s favorite bookie, the odds are that you will not receive a Form 1099-G. In such cases, let your conscience be your guide. But remember, winnings from gambling are fair game and considered taxable income.
If you are a casual gambler, like your mother-in-law, you can deduct gambling losses up to the amount of your gambling winnings – but only if you itemize your deductions.
As for the pros who hustle for their bread and butter on the betting scene, they can deduct all ordinary and necessary business deductions. But watch out, as the IRS scrutinizes these deductions closely.
So, ante up and enjoy the game with 73 percent of American adults in on the action. May luck be on your side with all your bets, however big or small! And here is a tip: as of the latest update, the 49ers are holding the winning hand by about two points, with the over-and-under set at 47 points.