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There’s a reason why many expect the global gambling industry to bring in $647.9 billion by the year 2027. Online platforms have made things like sports betting more popular than ever before.

Yet, the newness of the industry means there is still some confusion surrounding the laws. For example, are there taxes on sports betting?

If you want to learn the answer to this question, and more, you’re in the right place. In this article, we’ll teach you everything you need to know about taxes and gambling. Let’s get started!

Gambling Winnings Treated Like Income

Any income that you make is taxable. And, the IRS classifies gambling winnings as income. Keep in mind that it doesn’t matter if you’re a professional gambler.

Any time you get money from a casino, lottery, horse race, or raffle, you will need to report it. Whatever entity will issue you a Form W2-G to report any gambling winnings.

Taxes on Sports Betting Online

Many people think that they can beat the system by gambling on online sports betting sites. But, the IRS considers this form of online betting to be taxable income too.

This is only true if you win $600 or more from the website. When you win this amount, the website has a legal obligation to send you a Form 1099-MISC. They also need to send this form to the IRS.

What If You Don’t Receive a Form 1099?

As we mentioned, you need a Form 1099 to report to authorities the amount that you won. It also lets you know the amount of money you owe on your taxes from gambling online.

If you don’t receive a Form 1099 from the website, you will need to fill it out on your own. This also includes any winnings you may have gotten from Venmo, PayPal, and CashApp.

Deduct Losses When You Itemize

While it’s your legal responsibility to report gambling winnings, there is a bright side. The IRS allows you to deduct gambling losses when you itemize your deductions. For example, let’s say you won $50,000 gambling last year.

But, you lost $30,000 during the process. When you itemize everything, the IRS allows you to deduct this amount from your winnings.

Make sure that you keep a detailed log of our losses. But, keep in mind that you can’t claim the excess if your losses were greater than your gains.

Appreciate Learning About Taxes on Betting? Keep Reading

Ideally, this article helped you learn more about taxes on sports betting. The only certainties in life are death and taxes. And sadly, gambling doesn’t escape that fact.

But, if you itemize your deduction losses, you can reduce the amount that the government can tax. If this article helped you, keep reading. We often release content on the subjects like this so keep reading to learn more.