Financial advisors say IRS wants to know about your sports winnings
EVANSVILLE, Ind. (WFIE) - With football season well underway, millions of Americans are expected to bet on their favorite teams and players this season.
This is according to research from the American Gaming Association.
From College GameDay to Sunday NFL Countdown, sports betting is legal in Indiana and Illinois. It’s also incredibly popular.
Ben Joergens is the financial empowerment director with Old National Bank.
“You look at how much was bet alone in the Super Bowl earlier this year,” says Joergens, “millions and millions of dollars.”
Billions of dollars, in fact, according to a 2021 article from Forbes.
Joergens says more than 42 million people plan to wager on NFL games this season. If you are one of them, Joergens says there are some things you need to know.
He says, first, make sure you are wagering money that you can afford to turnover.
“We call this, in financial education terms, ‘risk capital,’” says Joergens. “So, I’m not using my life savings, but if I’ve got a little bit of money here and there that I’m okay with losing, and it’s not going to impact me, that is a different situation.”
If you do bet a couple of bucks this season, don’t forget about Mr. Taxman. Joergens says the IRS needs to know about your cash-outs.
Some regulated channels, like major sportsbooks, will likely send paperwork your way if you win more than $600, or 300 times your wager.
“We, generally, need to keep in mind that if we do have winnings,” says Joergens, “we should be reporting that to the federal government. If there was a form issued, they are going to be looking for that reportable piece on the tax return as well.”
With that in mind, what exactly is considered “winning big?” When should you ask for financial advice from local experts?
“It is a personal feeling of what that ‘win big’ means to someone,” says Joergens. “But, you know, winning a large amount in the thousands of dollars. It’s not a $20 win or a $100 win, but when we get over that threshold of $600 that was mentioned, I would say it is probably a good idea to check with a tax expert to make sure they are following the proper protocols.”
Joergens suggests winners set aside their cash winnings for emergencies or even investing.
As a reminder, though, he says gambling can be addictive. That’s why he encourages people to only bet with risk capital and do so responsibly.
If you or someone you know needs help to stop an addiction, call the National Gambling Addiction Helpline at 1-800-522-4700.
Copyright 2021 WFIE. All rights reserved.