Sacked! Super Bowl winnings taxable
Feb 2nd 2009 11:00AM
Updated Feb 12th 2009 4:08PM
As if paying the nanny tax and being taxed for unemployment benefits weren't enough, remember that the IRS wants its cut of any gambling winnings from Super Bowl bets.
The Pittsburgh Steelers won, and if you did too with a bet or two in the office pool, then you're supposed to report the winnings as income on Schedule A of your federal tax return, according to a story in Arizona Republic.
A lot of people don't know about this, with one-third of respondents in a recent H&R Block survey indicating they didn't' realize gambling winnings are taxable. Money from prizes or awards, such as a trip or new car from a lottery, a local raffle, casino or sports betting, are to be reported as income. Winners could also be subject to estimated tax payments on their winnings as well.
"If you win an informal office pool, you technically are supposed to report it," John W. Roth, a senior federal tax analyst at tax researcher CCH told the Republic.
"But I think (the IRS) is more concerned about Internet betting, which is easier to track through credit cards."
An audit is most likely to lead to gambling winnings being found, and casinos furnish tracking cards to help large gamblers keep track. Gambling losses are deductible if used to reduce winnings.
Other income areas that people don't know about or ignore include investments, unemployment benefits, the nanny tax, and annual gifts of more than $12,000 to any single recipient.
At least the Super Bowl only happens once a year. It's a little easier to remember at tax time.