When it comes to Super Bowl, folks think chili, beer and commercials. They also think gambling. It’s one of those games that inspires a lot of big money, sure, but also enormous numbers of side bets and the ubiquitous office pools.
What does gambling have to do with tax? Plenty. Gambling winnings, no matter whether the source of your winnings are legal, are fully taxable and must be reported on your tax return. Winnings include proceeds from lotteries, raffles, horse races, casinos, cash winnings (just ask Richard Hatch) and the fair market value of prizes such as trips and cars (remember Oprah’s infamous Pontiac giveaway tax flap?).
And if you lose? Well, hopefully you won something along the way. You can only deduct gambling losses if you itemize deductions on your tax return on a Schedule A and the amount of losses cannot be more than the amount of gambling income that you reported on your return. To prove this, it’s important to keep accurate records of your gambling winnings and losses. If you have legal winnings, the form that is used to report winnings and losses of varying amounts (depending on the kind of game) to the IRS is a form W2-G.
So, all of this doesn’t apply to you, right? I’m *betting* that it does. Experts estimate that over $10 billion (yes with a “b”) will be wagered on Super Bowl XLII – and over 50% of all adult Americans will participate.
All of that said, what is the official line on the Super Bowl? The Patriots are the favorites to win by 12 points.
I did a little informal poll on the Business Channel. Here’s what a few of my bloggers think:
Kelly (that’s me): Patriots 35, Giants 28
Phil at slackermanager.com: Patriots 42, Giants 20
Chris at doingbizabroad.com: Patriots 31, Giants 28
Thursday at onevotematters.com: Patriots 42-48, Giants 28-34 (the original spreadsheet had 6 point blocks)
Rico at contract-worker.com (who doesn’t even follow “American football” but graciously participated anyway) has chosen Eli Manning as his MVP pick.
Check back on Monday!
