If you base it on the amount of screaming and jumping in my house alone, the most exciting moment in tonight’s Super Bowl coverage was Carrie Underwood singing the national anthem. But then, to my knowledge, neither Peyton Manning nor Drew Brees has appeared in an evening dress at the same event as Taylor Swift so they can hardly compete with that. If you have young daughters in your house, you totally understand.
That said, the Super Bowl this year is a pretty exciting match up. It’s estimated that more than 150 million people will watch all or part of the game in some fashion, either on TV or online. That’s a lot of people eating guacamole, drinking beer, complaining about how the commercials aren’t as good this year as last and betting on the big game. Experts predict that nearly half of all American adults will make some sort of wager on the big game.
We can’t all be winners, trust me. You’re talking to a girl who had Matt Leinart in her lineup for Fantasy Football at one point. And I’m an Eagles fan. I know about losing.
But if you lose in gambling, you can’t deduct it as a loss on your taxes unless – and this is a big unless – you can offset your losses with any winnings during the year. It doesn’t matter how much you lose: if you lose $100 or $10,000, your losses are limited to the amount of your winnings. If you don’t have any winnings, you’re out of luck (pardon the pun).
Assuming that you have winnings to offset those losses, you’ll report them on your Schedule A. Yep, that means that you can only deduct gambling losses if you itemize. It’s considered a miscellaneous deduction, though, thankfully not subject to the 2% limit.
If you win, you’ll need to pay taxes on your winnings even if it wasn’t a legal bet. Legal or not, gambling winnings are fully taxable and must be reported on your tax return. And it’s not just the Super Bowl… All of those Fantasy Football competitions for cash, office pools for March Madness and good natured World Series wagers – they all count, as do winnings from horse races, poker tournaments and casinos. You’ll report it on your line 21 on your tax return as “other income.” If you win from a legit gambling site or a casino, they’ll issue you a form W-2G and may even withhold taxes from your winnings; if you win big and are not subject to withholding, you may want to make some estimated payments during the year so that you’re not hit with an underpayment penalty at tax time.
Win or lose, it really is how you play the game. So be smart and keep a journal of your wins and losses. It will not only be great documentation for the IRS, it’ll be a great conversation piece some day. Unless you’re an Eagles fan, in which case it will be just a sad, sad statement on your over reliance on Andy Reid’s game management.
As for the Saints and the Colts? The official line on the Super Bowl is the Colts by four. Interestingly, that’s exactly what it was at the half.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.