Therefore, after your loss deductions are made, the remaining winnings will be taxed.įor example, if a bettor had $10,000 of sports betting winnings in 2020, and $8,000 in losses, he could deduct the $8,000 of losses if he itemized his tax deductions. Taxpayers can only deduct losses up to the amount of their winnings under the “gambling-loss deduction” of the federal tax code. See also: Conor McGregor tops the list of highest-paid sports stars Whether you’re a professional bettor who makes all of his income betting on sports, or somebody who bets occasionally on NBA games in New Jersey, all winnings must be reported. “Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos.” “Gambling winnings are fully taxable and you must report the income on your tax return,” according to the IRS. The sportsbooks you use will also be reporting those winnings to the IRS. While all winnings must be reported to the IRS, you only have to pay federal taxes on them if you made over $600. See also: American families will finally get their Child Tax Credit money - here’s when the first payment will arrive Just like you report your income, you must also report how much money you won via legalized sports betting. Sports betting winnings are considered income.
Here’s what you need to know about legalized sports betting and taxes.
