With all the fun associated with bets being placed on March Madness, taxes are most likely not on the agenda for first thoughts. But as March Madness comes to and end … Spoiler alert: April taxes follow, and you should be thinking about those taxes for any type of gambling, including sports betting.
March Madness is anticipated to be the largest sports-betting this year. The American Gaming Association predicted that 47 million people will bet a combined $8.5 billion which is a significant amount more that was wagered on the Super Bowl (40 percent more to be exact).
The federal tax rules on gambling haven’t changed much in recent years however, some may easily overlook that sports betting now falls under the rules associated with all forms of gambling. Gambling winnings are subject to taxation on both the federal and state level as well. And if you have traveled outside of your state of residency to place your bets, you can expect to add a new state to your tax forms next year.
If your luck pays off for March Madness betting perhaps you may want to consider seeking professional tax guidance from a professional.