Keep Track of Your Losses
22.7 million Americans are expected to have wagered an $6 billion on Sunday’s Super Bowl, according to a recent survey from the American Gaming Association. If you happened to have won remember that gambling winnings are considered income and reportable to the IRS.
Generally speaking, winnings from sports wagers are considered to be taxable income if you win $600 or more and the win was 300 times more than the amount wagered. If this happens, then taxes should be withheld. And, your final tax bill could be higher or lower than the amount withheld, depending on your other income and a variety of other factors. And even if no tax is withheld, you’re not off the hook for claiming the income on your tax return.
One way to reduce what you owe on your winnings is to write off your gambling losses. Of course, you’d need to be able to back up your claims with documentation.
Additionally, you can only take a deduction for any gambling losses if you itemize your deductions on your tax return. The majority of taxpayers are not itemizers because they’re financially better off with the standard deduction, which was nearly doubled under new tax law that took effect in 2018. And, even if you do itemize, you cannot claim losses in excess of your actual winnings.
Check with your tax professional and always keep your losing stubs.
Advisors Capital Management, LLC is an investment advisor registered with the United States Securities and Exchange Commission. Registration does not imply any degree of skill or training. All investing carries risk, including the potential for the loss of principal and past performance is no guarantee of future results. This content is for informational purposes only, can change at any time without notice, and is not investment advice or a recommendation to trade any security. Indices are not available for direct investment. We only provide services in jurisdictions where we are registered. Our disclosure brochure (ADV Part 2A) and customer relationship summary (ADV Part 3) are available at https://adviserinfo.sec.gov and upon request.
