Super Bowl Bets Can Result in Taxes

You May Owe Taxes on that Super Bowl Bet

Placing a big bet on the Super Bowl has become a tradition for many people, and it’s not unusual for people who’d never place a sports wager any other time to bet on this particular game. What you may not know is that if you win, the IRS requires you to report it. Not knowing may not be unusual because many CPA firms in Las Vegas indicate that their clients often don’t bring W2-G forms to them when having their tax returns prepared.

Wager Winnings Will Result in a W2-G

When you bet through a reputable gambling institution, that outfit is required by law to report it if the winnings exceed $600 or 300 times the size of the bet amount. These winnings are reported by creating a W2-G, which is sent to the bettor and included in the sportsbook’s filings as well. If you receive a W2-G, then you have to include it in the following tax return.

The Honor System

All winning bets are on the honor system. That means you have to report them regardless of the amount, but if the bookie doesn’t file a W2-G, then the IRS has no way to track you. A W2-G is trackable, however, and while the IRS may not identify your failure to report a single bet, it could cause you complications down the line if you’re ever audited or need to file an amended tax return.

Writing Off Losses Is an Option

Keep in mind that you can report losses as well. Therefore, if you place other Super Bowl bets or sports bets throughout the year that lost, you can report those in order to mitigate your obligation on the winning bet. You cannot, however, report losses that exceed your winnings, and if you report significant losses, then you increase the chances of an IRS audit.