NFL betting has a silver lining for gambling losers

Earlier this month I burned $85.

I didn’t use a lighter or match. Rather, I joined and then immediately bombed out of an NFL survivor pool. In these games, each contestant must pick one NFL team to win each week, without picking the same team twice. If your team wins, you’ll survive another week. Lose, and you’re done for the year.

After two wild weeks of NFL action, even more serious gamblers are feeling the fire: Of the 6,133 participants who paid the $1,000 entry fee to enter the survival pool offered by the Circa Sportsbook in Las Vegas, only 2,033 remain. .

Can you blame us though? The prize for winning Circa’s pool is north of $6 million. My more modest pool’s pot is worth over $40,000. Imagine what you could do with that money.

As a financial writer, I’m here to tell you: First, you’d pay taxes on it.

“Any CPA will tell you to report income from any source,” said Ray Kondler, a certified public accountant with Kondler & Associates in Las Vegas. “If you win $100 in your office pool, theoretically you should report it.”

Read:Richarlison: Brazil forward racially abused as fan throws banana at him during 5-1 victory over Tunisia in France

That goes for winnings from casinos and legal sportsbooks, as well as payouts from unofficial pools like the one I’m no longer in.

If you hit a modest score, say a few hundred dollars, it’s up to you to report your winnings to the IRS – neither a casino nor Bob of the Bills to Pay will do it for you.

If you are a big winner at a casino (generally if your winnings are at least $600 and at least 300 times the amount of your stake), you will receive an IRS Form W-2G. The winner of my pool will not receive such documentation, but they would be wise to follow the law, Kondler says.

“They can take the $40,000 and put it in their bank account,” he says. But “if they’re checked, they’ll have a hard time explaining what that is.”

As for us losers, there is one silver lining: The IRS allows gamblers to deduct their losses – with a few important caveats.

First, if you are an amateur gambler, you will have to specify to take the deduction. Today, since the standard deduction for single filers is $12,950, most people don’t itemize it, meaning you’ll most likely have to take the loss on the chin.

Read:The Patriots might need a QB. Here are some alternatives to Mac Jones.

Professional gamblers have it slightly better. If you are a professional, you can deduct your losses as business expenses on Schedule C without having to itemize them.

Whether you’re a pro or not, you can only deduct losses to the extent that they offset your winnings. If you have $500 in winnings (which would be taxed as income) and $1,000 in losses, you can only deduct $500 in losing bets.

If you plan on doing some guesswork on your tax return, it’s smart to track your gains and losses separately throughout the year, Kondler says. “In a perfect scenario, you can show all your earnings and subtract all your losses,” he says. “If you play different events, try to keep track of what you enter and lose.”

Read:Andre Iguodala hilariously checks Jonathan Kuminga after Warriors return

If you’re lucky enough to score a huge win, like my survivor prize money, having some losses to report can help lower an further large tax bill. But make sure they are in fact your losses.

The last time I was at a sportsbook in Vegas, a gentleman roamed the room asking for lost tickets before frustrated gamblers ripped them up or smashed them — he even offered to exchange free drink coupons for my loss tickets.

It turned out that he had hit a $100,000 parlay early in the year and planned to use this collection of losing bets to offset his winnings. You don’t have to be an accountant to know that this strategy can put you in extremely hot water with the IRS.

Sign up now: Get smarter about your money and career with our weekly newsletter

Do not miss: Filing Taxes in These 17 States May Get You a Government Inflation Reduction Check — Here’s Who Qualifies

Previous post
Local Marijuana Business Bans Are Helping Illicit Markets Thrive In Legal States, Report Finds
Next post
KTLA’s Mark Mester fired after rogue rant on Lynette Romero